Crude Surge Hinders Rally (TheStreet)

By Robert Holmes
TheStreet.com Staff Reporter

The S&P 500 traded through its all-time closing high Monday, but a sharp increase in oil prices kept the big-cap index from holding on and making history.

At the end of trading, the S&P was up 2.35 points, or 0.15%, to 1525.10. Earlier, it pushed above its best-ever finish of 1527.46, set in March 2000.

The Dow Jones Industrial Average also moved deeper in to record territory, rising by as many as 30 points, before pulling back. The Dow ultimately lost 13.65 points, or 0.1%, at 13,542.88.

Meanwhile, the Nasdaq was the best performer of the bunch, better by 20.34 points, or 0.8%, at 2578.79.

For a time, the bulls appeared to be taking control of the session, but a steady advance in crude cut the rally short. June dated oil futures ended with a gain of $1.33 at $66.27 a barrel.

"The market was strong early, following last week's strength, but the shoot up in oil prices took the edge off," said Phillip Roth, chief technical market analyst with Miller Tabak. "I view this as an uptrend that is intact, but a lot of stocks are struggling. We'll continue to be choppy, and we probably will have a week without any progress."

About 3.31 billion shares changed hands on the New York Stock Exchange, where advancers beat decliners by a 5-to-3 margin. Volume on the Nasdaq reached 1.93 billion shares, as winners outpaced losers 2 to 1.

On the corporate side, the newest round of takeovers was making headlines, including a roughly $25 billion deal for Alltel (AT - Cramer's Take - Stockpickr - Rating). TPG, formerly Texas Pacific Group, will team up with the private-equity arm of Goldman Sachs (GS - Cramer's Take - Stockpickr - Rating) to acquire the wireless carrier, and Alltel rose $4.39, or 6.7%, to finish the day at $69.60.

Elsewhere, General Electric (GE - Cramer's Take - Stockpickr - Rating) confirmed that it will sell its plastics division for $11.6 billion to Saudi Basic Industries. GE, which said it expects the deal to close during the third quarter, was higher by 14 cents, or 0.4%, to $37.10.

Another transaction will see Hologic (HOLX - Cramer's Take - Stockpickr - Rating) purchase Cytyc (CYTC - Cramer's Take - Stockpickr - Rating) in a $6.2 billion combination that will unite two sellers of health care products for women. Cytyc surged $7.95, to 22.7%, to close at $43.

Lastly, Olin (OLN - Cramer's Take - Stockpickr - Rating) agreed to acquire fellow chlorine and caustic soda maker Pioneer (PONR - Cramer's Take - Stockpickr - Rating) for $35 a share, or $413 million. Shares of Pioneer jumped $4.81, or 16.4%, to $34.19.

"While just a bit fanciful, the markets are not interested in stopping or even slowing down for economic reports that conflict with the view that all is well in the world of investing," said Paul Nolte, director of investments with Hinsdale Associates. "While the current euphoria over stock investing will likely last for a while longer, we are surprised at the few actual declines in the markets over the past two months."