Closing Bell

U.S. stocks rose on Tuesday as solid earnings and a flurry of merger activity underpinned a steady upward trend that reinforced investor optimism for the coming year. The S&P 500's close is on the cusp of closing levels not seen since before Lehman Brothers collapsed in September 2008, an important psychological barrier for investors at SPX 1,255. Financials led the way higher, continuing their December rally after underperforming the broader market for much of the year. The KBW bank index jumped 1.9 percent. Fund managers have been reallocating cash to equities from fixed income and reduced cash positions. While the S&P on Tuesday closed a hair below the 1,255 level breached on September 19, 2008, it surpassed the September 12, 2008 close of 1,251.70, which was the session before Lehman's bankruptcy. The S&P 500 notched another two-year high. The index has rallied 6.3 percent for the month and is up 12.5 percent for the year.