Bank stocks rallied sharply on Monday's deluge of merger announcements.

Shares of Chemical Banking Corp. and Chase Manhattan Corp. jumped about 10% apiece as trading opened, on word that the New York money-centers had hammered out a $10 billion agreement over the weekend that could result in $1.5 billion in annual cost savings. Chase closed at $59.625, up $6.625 for the day. Chemical shares rose $5.625 to $60.

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