(AP) - Stocks began the day under pressure, but by the closing bell, they were rallying.
Investors were cheered by reports of possible consolidation involving financial firms and airlines.
The Wall Street Journal told of talks to acquire Countrywide Financial by Bank of America. Countrywide shares rose some 50 percent, in reaction.
The Journal also reports that Delta's board will be asked to allow formal merger talks with Northwest and United. The idea is that it could ultimately choose to combine with one of the two.
Added to that, Federal Reserve Chairman Ben Bernanke told a Washington group that the central bank was prepared to slash interest rates as needed to prevent housing and credit problems from plunging the country into a recession.
The Dow gained nearly 118 points to 12,853.
The S&P surged 11 points to 1,420.
And the Nasdaq composite rose about 14 points to 2,488.
Advancing issues topped decliners by a 2 to 1 margin.
About 5 billion shares changed hands on the NYSE, while trading on the Nasdaq stock market was 2.5 billion shares.
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