Stocks higher on reports of CIT rescue

NEW YORK -- Stocks rose Monday as investors welcomed media reports that commercial lender CIT Group has a deal with key bondholders that will help it avoid bankruptcy.

Stocks are following world markets higher after reports in The New York Times and The Wall Street Journal said CIT's board approved a deal late Sunday with major bondholders to receive $3 billion in emergency funding. Both the Times and the Journal cited people familiar with the matter. CIT representatives could not immediately be reached for comment.

The money will give the troubled company time to restructure and pay down billions of dollars in debt due later this year.

Worries about the fate of the debt-laden company have plagued investors over the past week, as CIT's problems mounted and negotiations with federal regulators for bailout funds fell through. Its failure would have been a big blow to investor confidence and would have hurt industries like retailing, which has suppliers who reply on CIT for financing.

A string of good earnings news sent market indicators up about 7% last week, giving both the Dow Jones industrials and the Standard & Poor's 500 index their biggest weekly gains since early March, when the market's spring rally began.