NEW YORK (AP) _ Wall Street extended its big rally today as merger talk and the government's latest trade report persuaded more traders to jump into the stock market.

The Dow Jones industrial average, already up 528 points over the past four sessions, was up 146.24 at 8,612.69 in early afternoon trading.

Broader market indexes were also higher, and New York Stock Exchange trading was heavy.

Events of the past few days have given the market momentum that is carrying it to levels not seen since before the precipitous decline of late August.

A spate of merger reports and rumors was kept alive today with a published story that New York-based Bankers Trust could be the target of a takeover bid from Germany's Deutsche Bank. Mergers between two health care-related companies, McKesson and HBO, and between Clorox and First Brands, helped push the Dow nearly 50 points higher Monday.

Also boosting investor optimism today was the government's report that the U.S. trade deficit swelled to a record $16.8 billion in August as the Asian economic crisis pushed exports down for a fifth straight month.

The global economic crisis and its effects on the U.S. economy prompted the Federal Reserve to make a surprise downward adjustment in short-term interest rates on Thursday, a move that sent stock prices immediately soaring.

Today's trade report helped bolster the belief that the Fed would continue to push rates lower when its policy-making committee meets in early November.