February 19, 2013-Stocks Close Higher on Euro Economic Optimism

Despite indications that the markets are at overbought levels, stocks moved notably higher over the course of the trading day on Tuesday. A rally in Europe and optimism about further merger-and-acquisition activity helped generate continued buying interest. The major averages all ended the day firmly in positive territory, reaching new multi-year closing highs. The Dow rose 53.91 points or 0.4 percent to 14,035.67, the Nasdaq advanced 21.56 points or 0.7 percent to 3,213.59 and the S&P 500 climbed 11.15 points or 0.7 percent to 1,530.94. The strength on Wall Street was partly due to a rally by European stocks, which moved sharply higher on the heels of an upbeat report on economic sentiment in Germany. The Zew Institute's economic sentiment index for Germany rose 16.7 points to 48.2 in February, marking the third straight month of growth. Economists had expected a reading of 35. Positive sentiment was also generated by reports of additional activity on the merger-and-acquisition front, with Office Depot (ODP) and OfficeMax (OMX) both moving sharply higher on reports that the office supplies retailers are engaged in advanced merger talks.