US stocks close higher

Wall Street roared back today erasing its losses of last week after private-equity buyout deals involving companies such as Four Seasons Hotels Inc. and OSI Restaurant Partners Inc. revived investors’ belief that stocks still have room to run.

The gains came a day ahead of the US congressional elections, though the prospect of a power shift in Congress did not seem to unnerve investors.

“I think what you’re seeing on the tape is a reflection of the amount of money that has been raised in the private equity pools and that money is starting to go to work,” said John O’Donoghue, co-head of equities at Cowen & Co.

He also said investors are growing more confident that the elections will bring gridlock in Washington, a prospect Wall Street finds pleasing because it is seen as reducing risks to business interests.

The Dow rose 119.51, or 1.00%, to 12,105.55. The Dow moved back above the benchmark 12,000 level after closing below that Friday, when the blue chip average ended the week down 104.22 points. The Dow had not closed below that level since it first finished above 12,000 for the first time on Oct. 19.

Broader stock indicators also advanced today. The Standard & Poor’s 500 index was up 15.48, or 1.13%, at 1,379.78, and the Nasdaq composite index advanced 35.16, or 1.51%, to 2,365.95.