Stocks gained steadily on a round of corporate takeovers and reports that Europes bail-out fund will be larger than anticipated.Associated Press reported on Monday that the Dow Jones industrial average gained nearly 100 points at midday. The Nasdaq composite index turned positive for the year.The takeovers helped push the Russell 2000 index of small companies up by 2.8 per cent as investors moved money into higher-risk assets and looked for companies that might become takeover targets.Investors are still waiting for a resolution to Europes debt problems. European leaders said they made progress at a weekend summit and plan to unveil concrete plans for containing the crisis by Wednesday. The Dow was up by about 40 points in the first hour of trading but moved steadily higher through midday following reports that Europes takeover fund will be greatly expanded.Even with concerns about Europe, United States companies are still reporting bigger profits. "Although there is a good deal of economic and political uncertainty in the world, we are not seeing it much in our business at this point," Caterpillar Chief Executive, Mr. Doug Oberhelman, said.The maker of construction equipment reported a 44 per cent surge in income, more than Wall Street analysts were expecting, thanks to strong growth in exports. The company said it expected the global economy to continue recovering, albeit slowly.The Dow Jones industrial average rose by 99, or 0.8 per cent, to 11,907 at noon Eastern. Caterpillar jumped by 6.1 per cent, the most of the 30 companies in the Dow.The Standard & Poors 500 index gained 14 points, or 1.1 per cent, to 1,252. The Nasdaq composite rose by 56, or 2.1 per cent, to 2,693.The gains turned the Nasdaq positive for the year. The S&P 500 is the only major market index that remains lower than where it started the year.Strong earnings reports from McDonalds Corporation and other big US companies last week drove the Dow Jones industrial average to its third straight weekly gain. The S&P 500 finished the week at its highest level since August 3, just before Standard & Poors downgraded the US governments credit rating.Other major US companies due to report earnings this week include UPS Incorporated, Ford Motor Company and Procter & Gamble.Analysts expect companies in the S&P 500 to report earnings growth of 14 per cent for the third quarter, according to data provider FactSet. They expect a 10 per cent gain in revenue.Expenses are also expected to climb, and higher costs on raw materials helped drag down income by eight per cent at Kimberly-Clark Corporation, which reported results Monday. The stock fell by five per cent. The company is a major consumer products maker whose brands include Huggies and Kleenex.Higher costs also hurt cigarette maker Lorillard, which reported a three per cent drop in income. Lorillards stock fell by 1.5 per cent.
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