Stocks Climb as Summers Withdrawal Bolsters Stimulus Outlook; Apple Falls

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NEW YORK ( TheStreet) -- U.S. stocks gained Monday as investors bet on an extension of the Federal Reserve 's stimulus program and a smooth leadership transition at the central bank as former U.S. Treasury Secretary Larry Summers withdrew his name from consideration as the next Fed chairman.

Summers, President Obama's apparent favorite to succeed Chairman Ben Bernanke, reportedly removed himself from the running following unusually strong political opposition to his candidacy from Democrats, all but assuring the ascension of current vice-chair and low interest-rate advocate Janet Yellen to run the bank beginning in February.

Markets were further bolstered by Chrysler's plan to file documents this week to hold an initial public offering . Respite from Syria anxieties was also seen as a positive as the U.S. and Russia negotiated a proposal to remove or destroy the Middle Eastern nation's chemical weapons by the middle of next year, delaying airstrikes indefinitely.

The S&P 500 gained 0.57% to 1,697.60. The benchmark index began the session up 18.36% year to date. The Dow Jones Industrial Average added 0.77% to 15,494.78. The Nasdaq dropped 0.12% to 3,717.85.

The Nasdaq's decline came after Wall Street punished Apple for the fourth of the past five trading sessions, almost a week after investors shrugged at the new iPhone 5C and iPhone 5S. Shares dropped 3.2% to $450.12 Monday as the stock won the inauspicious distinction of the day's worst performer on the S&P 500.

Conversely, Allegheny Technologies was the biggest gainer on the S&P, jumping 8.1% to $30.95 after the metals producer said it will sell its tungsten materials business to Kennametal for $605 million. Kennametal increased 0.9% to $46.39.

Bristol-Myers Squibb tacked on 3.6% to $45.14 after analysts at JPMorgan upgraded the pharmaceutical stock to "overweight" from "neutral," lifting its price target to $52 from $50 due to catalysts including the company's immunotherapy platform.

Ahead of the open, the New York Federal Reserve's Empire State manufacturing index showed a smaller-than-expected increase to 6.29 for September from 8.24 in August; an increase to 9.2 was expected, according to a Thomson Reuters poll of economists. It was the lowest level since May but remained in expansionary territory for the fourth consecutive month.

The Federal Reserve said that industrial production rose by an as expected 0.4% in August after being flat in July and that capacity utilization increased to an as predicted 77.8% from 77.6%.

President Obama on Wednesday marked the 5-year anniversary of Lehman Brothers' bankruptcy by listing the various reforms his administration has implemented since the crash, but reminded Americans that the economy is not where it needs to be.

The benchmark 10-year Treasury was lifting by 2/32, diluting the yield to 2.880%.