MARKET SNAPSHOT: U.S. Stocks Gain As Summers Exits Fed Race

By Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks mostly rose on Monday, lifting the S&P 500 to within reach of its record, as Wall Street celebrated Larry Summers taking his name out of the running to head the Federal Reserve.

"Summers had been a critic of quantitative easing, and global markets are thrilled he will not be in charge of taking away their 'fix' too quickly," wrote Nick Raich, chief executive officer at the Earnings Scout, in emailed commentary.

Equities were also bolstered by a weekend agreement between the U.S. and Russia on a plan to get rid of Syria's chemical weapons.

"After the initial shock of the Summers announcement begins to wear off, we expect the stock market to consolidate recent gains, as it digests Fed news and waits to see how developments in Syria progress," noted Fred Dickson, chief investment strategist at Davidson Companies.

The S&P 500 index (SPX) was 10.99 points from its record of 1,709.67 hit on Aug. 2, as it traded up 10.69 points, or 0.6%, at 1,698.68. Materials paced gains among its 10 major sectors, only one of which -- technology -- was in negative turf.

While the S&P 500 on Monday flirted with its first close above 1,700 in six weeks, a Citi Research analyst said he sees the index climbing to 1,900 by the end of 2014.

Shares of Packaging Corp. of America (PKG) leapt 8.8% after the maker of corrugated shipping boxes said it would acquire Boise Inc.(BZ) for about $1.27 billion. Boise rallied 26%.

Apple Inc. (AAPL) fell 3.4%, making the consumer technology company the top decliner on the S&P 500, and adding to losses that have had its shares knocked four out of five sessions since the introduction of a lower-cost iPhone.

Allegheny Technologies Inc.'s (ATI) shares rose 8.7% after the metal processor agreed to sell its tungsten materials unit to Kennametal Inc. (KMT) for $605 million.

After a 174-point rise, the Dow Jones Industrial Average (DJI) was lately up 133.81 points, or 0.9%, to 15,510.03.

After hitting a 13-year high of 3,756.24, the Nasdaq Composite (RIXF) was lately down 1.75 points, or 0.1%, at 3,720.43.

For every stock falling, more than two rose on the New York Stock Exchange, where almost 403 million shares traded by 3:15 p.m. Eastern. Composite volume surpassed 2.3 billion.

The dollar (DXY) declined against the currencies of major U.S. trading partners and the yield on the 10-year Treasury note (10_YEAR) dropped 2 basis points to 2.871%.

On the New York Mercantile Exchange, oil futures (CLV3) fell $1.62, or 1.5%, to $106.59 a barrel, a three-week low.

The price of gold (GCZ3) rose $9.20, or 0.7%, to $1,317.80 an ounce, settling higher for the first session in five.

The exit by Summers, a former Treasury secretary and economic adviser to President Barack Obama, came as some Democrats on the Senate Banking Committee voiced opposition to his nomination, which had not been announced.

His exit comes just ahead of a two-day Fed meeting that begins Tuesday, with the central bank expected to start cutting its $85 billion in monthly bond purchases, which are otherwise known as quantitative easing. That stimulus has helped the S&P 500 surge more than 150% from its March 2009 low.

A critic of quantitative easing, Summers was viewed as more likely to tighten monetary policy than Janet Yellen, the current Fed vice chair now considered the most likely person to replace Ben Bernanke as Fed chief.

Monday's economic reports included manufacturing in the New York region expanding less than expected this month, despite a pickup in orders and shipments.

The Federal Reserve said industrial production climbed in August.

On Friday, Wall Street knocked out a second week of gains as worries about Syria ebbed and as investors looked to this week's monetary-policy decision by the Fed.

On Monday, a United Nations report found "convincing evidence" that poison sarin gas was used in an Aug. 21 attack that killed more than 1,400 people near the Syrian capital of Damascus.

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