Stocks climb on Dubai bailout

NEW YORK | Easing concerns about global credit problems and more signs of corporate deal-making nudged major stock indexes to new highs for the year.

Stock indicators rose but posted uneven advances Monday upon news that Abu Dhabi had extended $10 billion to Dubai to help the Middle Eastern city-state stay afloat. Markets had been worried in recent weeks that debt problems in the former boomtown could send ripples through global credit markets.

Investors were also encouraged by Exxon Mobil Corp.’s $31 billion purchase of XTO Energy, which sent energy stocks sharply higher. The deal will help Exxon tap into the growing supply of natural gas in the United States and could signal more consolidation in the energy industry.

In other news, banking giant Citigroup Inc. said it would pay back $20 billion in bailout money that it received as part of the government’s financial rescue program. The government will also sell its 34 percent stake in the company. The news came just days after Bank of America Corp. repaid its $45 billion in bailout money.

Despite the gain in stocks, investors were being cautious, refraining from making big bets in any one area of the market as they have for the past few weeks. Bond prices were little changed, and commodities were just slightly higher.

The Dow Jones Industrial Average rose 29.55, or 0.3 percent, to 10,501.05, its highest close since Oct. 1, 2008.

The broader Standard & Poor’s 500 Index rose 7.70, or 0.7 percent, to 1,114.11, its highest finish since Oct. 2, 2008. The Nasdaq Composite Index rose 21.79, or 1 percent, to 2,212.10.

The yield on the benchmark 10-year Treasury note was flat at 3.55 percent from late Friday.

Analysts said stocks are likely to drift over the next few days as investors await more details from the Federal Reserve, which wraps up its last policy meeting of the year Wednesday.

Investors expect the central bank to keep its benchmark interest rate at a historic low level of near zero for the time being. But there is some concern that rates could rise sooner than previously thought as the economy improves.

In other trading, the Russell 2000 Index of smaller companies rose 9.42, or 1.6 percent, to 609.79.