Centex rallied 19 percent as Pulte Homes said it will buy the company in a $1.3 billion stock deal. Lincoln National Corp., Hartford Financial Services Group Inc. and Prudential Financial Inc. climbed as the Treasury said it may give Troubled Asset Relief Program funds to life insurers. Bed Bath & Beyond Inc., the largest U.S. home-furnishings retailer, rose the most in nine years on better-than-estimated earnings.
The Standard & Poor’s 500 Index increased 1.2 percent to 825.16. The Dow Jones Industrial Average rose 47.55 points, or 0.6 percent, to 7,837.11. Four stocks gained for each that fell on the New York Stock Exchange. The MSCI World Index of 23 developed nations added 0.4 percent.
Benchmark indexes briefly turned negative in the final two hours after the minutes from the Federal Reserve’s last policy meeting said downside risks” remained in the economy. Policy makers feared the nation might fall into a self-reinforcing cycle of rising unemployment and slumping spending, the minutes showed.
The S&P 500 has surged 22 percent since reaching the lowest level in a dozen years on March 9 as banks from Citigroup Inc. to JPMorgan Chase & Co. said they made money in the first two months of the year and Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic asset.