Wall Street cheers as CIT is rescued

US stocks jumped yesterday, driving the S&amp;P 500 to an eight-month closing high, after stricken lending giant <strong>CIT</strong> <strong>Group</strong> was thrown a lifeline to avoid bankruptcy, and investors bet corporate America would log another strong set of earnings this week.<br /><br />Broker upgrades of technology bellwethers, including <strong>Cisco Systems,</strong> propelled the Nasdaq to its ninth straight daily advance -- matching a streak from July 1998. The Nasdaq closed at a high for the year.<br /><br />CIT, a lender to nearly 1m small- and mid-sized US companies, reached a deal with bondholders for $3bn in emergency financing yesterday, sending shares of the firm soaring 78.6 per cent to $1.25. Investors were encouraged by signs that the CIT rescue was a private-sector measure instead of a government bailout.<br /><br />&ldquo;The private money is really the smarter money. They are not going to go in there unless they think it&rsquo;s going to work,&rdquo; said Tom Alexander, head of Alexander Trading. &ldquo;I think that&rsquo;s a healthy sign for the market and a sign of liquidity and a willingness of private participants to step up to the plate.&rdquo;<br /><br />The Dow Jones industrial average shot up 104.21 points, or 1.19 per cent, to 8,848.15. The Standard &amp; Poor&rsquo;s 500 index gained 10.75 points, or 1.14 per cent, to 951.13. The Nasdaq Composite index rose 22.68 points, or 1.20 per cent, to 1,909.29.<br /><br />Yesterday&rsquo;s rally extended the market&rsquo;s recovery further above the 12-year lows in early March. The Nasdaq hit its highest close since October 2008, while the Dow registered its highest close since January 2009.<br /><br />Analysts who focus on technicals expect more upward momentum after the S&amp;P 500 punched through near-term resistance at the 950 level.<br /><br />The earnings season is continuing to build up steam this week after a strong start from companies such as <strong>Goldman Sachs</strong> and <strong>Intel</strong>. <br /><br />Analysts at Bank of America-Merrill Lynch raised <strong>Caterpillar</strong> to a &ldquo;buy&rdquo; recommendation, saying the second quarter could mark a bottom for the construction sector&rsquo;s woes. Caterpillar advanced 7.8 per cent to $36.65 and gave the top boost to the Dow, followed by <strong>United Technologies</strong> &ndash; another big manufacturer &ndash; up 2.2 per cent at $54.97.