US stocks end off session highs; S&P 500 just below record close

Monday, 24 Feb 2014 | 4:08 PM ET

By: Kate Gibson | Markets Writer

Pisani: Classic technical breakout

Monday, 24 Feb 2014 | 11:53 AM ET

CNBC's Bob Pisani looks at what's moving the stock market as the S&P hits new highs, and highlights the sectors leading the way.

U.S. stocks rallied on Monday, lifting the S&P 500 to a intraday record and briefly clearing its 2014 loss, as investors embraced activity on the M&A front and continued to disregard lackluster economic data as largely due to winter weather.

Mergers and acquisitions came into play, with RF Micro Devices agreeing to acquire TriQuint Semiconductor for about $1.6 billion, while Men's Wearhouse hiked its cash tender offer for Jos. A. Bank Clothiers.

"Maybe stocks are not overpriced at these levels if you have big players coming in and still doing deals," said Chris Gaffney, senior market strategist at EverBank.

"Bad weather is going to impact housing and retail sales; once it's spring and the weather is not so bad, we'll see a true reading on the economy," Gaffeny added.

(Read more: Wicked weather taunts traders betting on regaining highs)
Pfizer rose after the drugmaker said a study involving 85,000 people showed Prevenar 13, its blockbuster vaccine against childhood infections, prevented community-acquired pneumonia in people 65 and older; Humana shares rallied after the health insurer said the government's proposed cuts to Medicare appear to be less than previously thought, and Netflix agreed to pay Comcast for quicker speeds. Shares of eBay climbed after Carl Icahn accused the online auctioneer of lapses in corporate governance and reiterated his call for the spinoff of its payment business.

(Read more: Billionaire investor rips eBay board)

	Name	Price	Change	%Change
DJIA	Dow Jones Industrial Average	16207.14	103.84	0.64%
S&P 500	S&P 500 Index	1847.61	11.36	0.62%
NASDAQ	Nasdaq Composite Index	4292.97	29.56	0.69%

The Dow Jones Industrial Average climbed as much as 197 points, and ended at 16,207.14, up 103.84 points, or 0.6 percent.

The S&P 500 rose to a high of 1,858.76, clearing both the intraday and closing records set on Jan. 15. The index ended at 1,847.61, up 11.36 points, or 0.6 percent.

Rising to a 13-and-a-half-year high, the Nasdaq rose 29.56 points, or 0.7 percent, to 4,292.96

The dollar edged lower against the currencies of major U.S. trading partners, while the 10-year Treasury yield used to figure mortgage rates and other consumer loans fell a basis point to 2.746 percent.

On the New York Mercantile Exchange, crude-oil futures and gold futures gained, the former up 63 cents at $102.82 a barrel and the latter rising $14.40 to $1,338 an ounce.

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Ahead of Wall Street's start, an initial gauge signaled growth in the services sector slowed in February, with stock futures retaining the bulk of their modest gains.

"I do think the economy is a lot stronger than the recent data has suggested," said Bruce Bittles, chief investment strategist at RW Baird & Co.

That said, "if the economy starts to get too heated up, then you have to think about higher wages going forward, which leads to inflation, and puts pressure on the Fed to finish the taper more quickly than they might have wanted, and brings the possibility they could raise rates sooner than 2015," Bittles added.

In testimony this month, Fed Chair Janet Yellen said the U.S. economy had picked up enough traction to handle reduced monetary stimulus, three rounds of which are viewed as helping propel equities higher.

Yellen on Thursday delivers her weather-delayed testimony before the Senate.

Stocks fell on Friday, but the Nasdaq still managed a third weekly gain, as Wall Street considered earnings and another downbeat economic report.

—By CNBC's Kate Gibson