Stocks advanced Monday following upgrades on Alcoa and Intel and a big health-care deal. Plus, the dollar declined.
In early trading, the Dow Jones Industrial Average was up more than 1 percent, as were the S&P 500 and Nasdaq. The Nasdaq reached a new intraday high for the year around 2,240.
The dollar slipped against both the euro and yen, while February crude topped above $75 a barrel. The January contract expires later Monday. Gold held steady after recent multi-week lows.
"We've got a mildly positive commodities complex and mildly weaker dollar, which seem to be the drivers early here," Art Hogan, chief market analyst at Jefferies, told Reuters.
Heading into the final two trading weeks of the year, it's unclear whether major indexes will log gains for December but gains for 2009 are all but locked in.
Intel was the biggest gainer on the Dow after Barclays upgraded the stock to "overweight."
Alcoa was upgraded by Morgan Stanley to "overweight." Separately, Alcoa announced a partnership Sunday with Saudi Arabian Mining to develop a low-cost aluminum.
In a big M&A deal, Paris-based Sanofi Aventis said it will acquire Chattem in 2010 for $1.9 billion in cash, an acquisition expected to create the world's fifth-largest healthcare company. Chattem shares shot up, reflecting the premium offered in the $93.50-a-share deal.
And Pfizer said it's buying the rights to a stem-cell therapy to treat inflammatory bowel disease from Atherys.
Another deal over the weekend saw Bucyrus International agree to buy the mining unit of Terex for $1.3 billion. The deal will allow Terex to ask for $300 million worth of Bucyrus shares.
Positive earnings news also helped boost investor spirits, with drugstore chain Walgreen reporting a quarterly profit gain of 20 percent that beat Wall Street estimates.
Food maker ConAgra also beat analyst estimates as it said sales of of its products were helped by more people eating at home.
After the bell, Jabil Circuit is set to report its quarterly earnings.
Health care stocks will be worth watching, after the health care reform bill cleared a major procedural hurdle in the Senate overnight.
Though Republicans have vowed to delay the bill, it's likely to be passed by the end of the week, and it would then go onto a House/Senate conference for reconciliation.
Investors will be especially attuned to retail results for the final few days before Christmas, especially with the weekend blizzard in the Northeast cutting into what would have been busy holiday shopping traffic.
There could be some renewed interest in stocks like FedEx and UPS , with many shoppers having turned to online ordering after they couldn't make it out their front doors over the weekend.
Cell Therapeutics said European health regulators granted orphan status to its experimental drug pixantrone, which treats a type of cancer that affects the lymphatic system.
Fertilizer maker Potash saw its shares gain after Goldman Sachs added the company to its conviction buy list. Goldman also raised Potash competitor Mosaic to "buy" from "neutral," sending its shares higher.
General Motors has gotten some new expressions of interest for its Saab unit, potentially reviving a sale after GM said last week it would wind Saab down.
Though some important economic releases are on the schedule for later in the shortened trading week, none will be released Monday.
And while no Federal Reserve officials have scheduled appearances or speeches Monday, Chicago Federal Reserve President Charles Evans will talk speak to CNBC in an exclusive interview at 10 am New York time.