MARKET SNAPSHOT: U.S. Stocks Surge On Revived Consumer Spending

By Kate Gibson

U.S. stock gains accelerated Monday, driven higher by a rally in retail stocks after the Commerce Department said consumer spending rose to a record in March.

The Dow Jones Industrial Average (DJI) rose 143.22 points to 11,151.83, with all but one of its 30 components trading higher, led by Boeing Co. (BA), up 2.5%.

The S&P 500 Index (SPX) climbed 14.32 points to 1,201.01.

Consumer discretionary and industrial shares led the gains, with upscale retailer Nordstrom Inc. (JWN) among those rallying, its shares up 6.1%, after the government estimated U.S. consumer spending increased to a record high in March. .

Materials proved the only afternoon laggard among the S&P's 10 industry groups.

"The top groups continue to be the most cyclical and tied to the economic recovery," said Paul Nolte, managing director at Dearborn Partners.

Industrial stocks have led the market recovery from the beginning, while "safer" groups like utilities have been weak, Nolte added.

The Nasdaq Composite Index (RIXF) added 37.92 points to 2,499.1.

For every stock on the decline three were rising on the New York Stock Exchange, where 486 million shares were traded as of 12:30 p.m. Eastern. Composite volume neared 2.4 billion.

The Institute for Supply Management reported improved conditions for the nation's manufacturers, with its index jumping to 60.4% in April from 59.6% in March.

The Commerce Department estimated public spending on construction projects climbed in March. .

In another signal that corporate America is returning to deal-making, United parent UAL (UAUA) is acquiring Continental (CAL) in a stock deal valued at about $3.2 billion. .

Noting that the airline merger comes in the wake of last week's announcement that Hewlett-Packard Co. (HPQ) would acquire Palm Inc. (PALM), one analyst noted a positive trend in the spate of M&A.

"Markets tend to react favorably to these types of deals as they figure business conditions must be improving and the consolidation should create even stronger companies," said Andrew Fitzpatrick, director of investments at Hinsdale Associates.

In a similar vein, Avis Budget Group Inc. (CAR) said it was preparing to top a competitor's bid for Dollar Thrifty Automotive Group Inc. (DTG).

Avis' chief executive officer made the statement one week after Hertz Global Holdings Inc. (HTZ) offered $1.17 billion, or $41 a share, for Dollar Thrifty.

Greece's debt problems abated some after the European Union and the International Monetary Fund reached agreement on a $145 billion rescue plan.