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NEW YORK (Reuters) -Bitcoin hit a new record high on Monday as the world's largest cryptocurrency by market value continued to benefit from strong investor demand. The rally since the start of the year has been fueled by institutional investors, friendlier policies under U.S. President Donald Trump, and a bitcoin's increasing connection with global financial systems. Bitcoin rose as high as $125,835.92 after climbing above $125,000 for the first time on Sunday. It was last up 2.02% at $125,253.63, on course for the second straight session of gains. It has risen more than 33% this year. "Bitcoin is the hurdle rate. If you can't beat it, you have to buy it. And I think the next 12 weeks are going to be very fun for bitcoin holders," wrote Anthony Pompliano, founder and CEO of Professional Capital Management, in a letter to investors on Monday. Bitcoin's ascent has coincided with the weakness of the U.S. dollar against major peers as Trump's tariffs on U.S. trade partners and uncertainty about their impact have prompted investors to diversify away from U.S. assets. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was flat at 98.09. It is down nearly 10% this year. [FRX/] "Bitcoin has surged ever since it briefly broke below $110,000 just over a week ago. The current rally means that Bitcoin has added around 13% since 28th September," wrote David Morrison, senior market analyst at FCA-regulated fintech and financial services provider Trade Nation, in emailed comments. "Its daily MACD (Moving Average Convergence Divergence) has turned up sharply, and while this indicates a rise in upside momentum, it may be that bitcoin will need to consolidate before it has a chance to push up further."  (Reporting by Chibuike Oguh and Gertrude Chavez in New York; Editing by Chizu Nomiyama, Chris Reese and Richard Chang)

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By Stephen Culp NEW YORK (Reuters) -Wall Street stocks mostly advanced on Monday, as artificial intelligence-related dealmaking boosted investor sentiment even as the U.S. government shutdown extended through its sixth day.  The Nasdaq and the S&P 500 were on course to reach record closing highs, while the blue-chip Dow lingered barely in the red. Chips took the lead after AMD said it would supply AI chips to OpenAI in a deal that could generate tens of billions of dollars in yearly revenue and would allow the ChatGPT creator to buy a stake of up to a 10% in the chipmaker. AMD surged 26.1%, while the broader Philadelphia Semiconductor index rose 3.9%. "The economic backdrop, at least until the government shut down, has been fairly solid," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "Earnings season is coming up and there are a lot of favorable themes, so the path of least resistance is higher." The federal government remained shuttered for the sixth day as lawmakers idled in a partisan impasse. The shutdown has postponed the release of key economic indicators, forcing investors to rely on secondary, non-government data to gauge the timing and extent of Federal Reserve interest rate cuts. Monetary policymakers have cautioned against rushing to lower the Federal funds target rate as inflation remains high, while others believe signs of softness in the labor market merit rate cuts. Financial markets have priced in an all-but-certain 94.6% chance of a 25 basis point interest rate reduction at the conclusion of the Fed's October meeting. Without new U.S. government data this week, market participants are monitoring reports on outstanding consumer credit, mortgage demand and the University of Michigan's preliminary take on October consumer sentiment. The Dow Jones Industrial Average fell 28.56 points, or 0.06%, to 46,729.72, the S&P 500 gained 32.63 points, or 0.49%, to 6,748.42 and the Nasdaq Composite rose 186.15 points, or 0.82%, to 22,966.16.  Among the 11 major sectors of the S&P 500, tech and consumer discretionary led the gainers, while consumer staples suffered the steepest percentage decline. Next week, investors will find catalysts as third-quarter earnings season gets underway, with results from large U.S. banks launching the festivities. Analysts estimate aggregate year-on-year S&P 500 earnings growth of 8.8% for the July-to-September period, up 0.8 percentage points from projections at the beginning of the quarter, according to LSEG data. Tesla advanced 4.4% after the electric carmaker teased an event scheduled for Tuesday on social media platform X over the weekend. TD Cowen cut its Starbucks price target, citing a weakening labor market affecting Generation Z, sending the coffee chain's shares down 4.2%. Bitcoin breached the $125,000 mark on Sunday, sending crypto-related firms Coinbase, Strategy, Riot Platforms and MARA Holdings all gained ground. Regional bank Comerica gained 14.3% after Fifth Third said it will buy the company in an all-stock deal valued at $10.9 billion. Verizon shares dipped 4.8% after the telecommunications company named former PayPal boss Dan Schulman as its new chief executive officer. Advancing issues outnumbered decliners by a 1.24-to-1 ratio on the NYSE. There were 547 new highs and 67 new lows on the NYSE. On the Nasdaq, 2,731 stocks rose and 1,885 fell as advancers outnumbered decliners by a 1.45-to-1 ratio. The S&P 500 posted 43 new 52-week highs and eight new lows while the Nasdaq Composite recorded 172 new highs and 48 new lows. (Reporting by Stephen Culp; Additional Reporting by Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Richard Chang)

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By Manya Saini and Saeed Azhar (Reuters) -Fifth Third on Monday agreed to buy regional lender Comerica in an all-stock deal valued at $10.9 billion, striking the biggest U.S. bank deal of the year that would create the nation's ninth-largest lender. Dealmaking has gained momentum under a Trump administration that has pledged to streamline the process for approving mergers. At the same time, regional lenders are looking to diversify their revenue, strengthen balance sheets and expand in growing markets as they seek to compete with larger rivals. "I expect we will see more combinations amongst regional banks because we are in an environment where bank M&A of equals or near equals makes a lot of sense," said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors. The regional bank index was up 2.2% in afternoon trading. The latest transaction could usher in more combinations, especially for banks with assets of up to $100 billion, two investment banking sources said. Two large regional lenders that have long been discussed as M&A candidates have done deals in the last two months. Comerica has long been seen as a target, while PNC announced the purchase of FirstBank last month. Other banks that have been floated as deal candidates include Zions Bancorp, Flagstar, First Horizon, East West , Popular, Western Alliance and Webster Financial, one of the sources said. Shares of First Horizon were up 3.6% and Flagstar was up almost 2%.  "That group is going to outperform from a price point of view because there is a bid for them," said a banker who advises financial institutions, who said the companies' shares had been supported by deal speculation. The banker declined to be identified discussing specific companies.  LIGHTER REGULATORY ENVIRONMENT Analysts have said consolidation is crucial for smaller lenders to compete with the nation's banking giants, with regional banks looking to take advantage of a potentially lighter regulation under the Trump administration. Comerica shareholders will receive 1.8663 Fifth Third shares for each Comerica share, valuing the deal at $82.88 per share based on Fifth Third's closing price on October 3. "Following the acquisition, Fifth Third will rank among the top five banks in every major Midwest MSA (Metropolitan Statistical Area)," TD Cowen analysts said.     The deal, adding to Fifth Third's large presence in the Midwest, will create a bank with $224 billion in deposits and $174 billion in loans. Shares in Comerica jumped 14%, while Fifth Third fell 1.5%. "Record bank stock prices have also allowed for a greater currency to do deals," said Stephen Biggar, analyst at Argus Research. The S&P 500 Banks Index has surged nearly 21% this year, outpacing the benchmark S&P 500's roughly 14% rise, through the previous close.  "Today's announcement will likely encourage more boardroom discussions about possible tie-ups, both large and small," Biggar said. The deal comes months after activist investor HoldCo Asset Management revealed it had built a stake in Comerica and urged the lender to pursue a sale. CROWN JEWEL FRANCHISE  Mergers and acquisitions are seen as crucial for regional lenders seeking to become more competitive in the U.S., which has more than 4,400 banks. "This is a crown jewel middle market banking franchise," a Fifth Third executive said on a conference call, adding his optimism about building its consumer network. The deal, which would create a lender with $288 billion in combined assets, expands Fifth Third's reach to 17 of the 20 fastest-growing U.S. markets, including Texas, California and parts of the southeast.  By 2030, more than half of the combined company's branches are expected to be located in these regions.  "This combination marks a pivotal moment for Fifth Third as we accelerate our strategy to build density in high-growth markets and deepen our commercial capabilities," Fifth Third CEO Tim Spence said. Many lenders are looking to build more diverse businesses with steadier revenue from fees collected in wealth management, payments or treasury services, to reduce the reliance on revenue from interest payments.  "This deal will accelerate FITB's expansion into high growth markets, and we believe FITB's consumer banking strength has the potential to improve growth in legacy CMA," Baird analysts said in a note.  Comerica CEO Curt Farmer will assume the role of vice chair in the combined company, while Peter Sefzik, its chief banking officer, will lead Fifth Third's wealth and asset management business. The deal is expected to close by the end of the first quarter of 2026, after which three board members of Comerica will join Fifth Third's board. Fifth Third shareholders will own about 73% of the combined company.  Goldman Sachs was the exclusive financial advisor to Fifth Third, while J.P. Morgan Securities and Keefe, Bruyette & Woods advised Comerica, with J.P. Morgan acting as lead advisor. (Reporting by Manya Saini in Bengaluru; Additional reporting by Arasu Kannagi Basil and Tatiana Bautzer in New York; Editing by Nick ZieminskiEditing by Arun Koyyur and Lananh Nguyen)

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