Stock market took a hit from Washington's budget battle Friday. A showdown over federal spending sent the stock market plunging in an afternoon sell-off that wiped out all the gains from a rally earlier this week.
Stocks rose Monday after Larry Summers withdrew his name from consideration to replace Federal Reserve chairman Ben Bernanke. Stocks were also helped by news that US factory output rose 0.7 percent in August, the most in eight months.
Alcoa and two other stalwarts of the Dow Jones industrial average are being replaced by newcomers Goldman Sachs, Nike, and Visa. The dropping of Alcoa and the other changes represent the biggest shakeup of the Dow in nearly a decade.
Stocks posted their biggest gains in almost two months Monday, thanks to big mergers and a good homebuilder outlook. Homebuilding stocks were some of the biggest gainers in the Standard & Poor's 500 index.