Bank stocks push market broadly higher
NEW YORK - Upbeat news for banks and homebuilders pushed the stock market broadly higher Monday, extending its gains for the month.
Better-than-expected results from Citigroup Inc. drove financial stocks up by more than 2 percent, halting a recent slide brought on by questions into how banks have handled foreclosures. The Dow Jones industrial average gained 81 points.
Citigroup said fewer of its customers defaulted on loans, an encouraging sign that consumer's balance sheets may be improving. Citi's shares rose 5.6 percent, lifting shares of other banks along with it including Wells Fargo & Co. and JPMorgan Chase & Co. Bank shares fell last week as fallout spread from accusations that banks had improperly processed large amounts of foreclosures.
The National Association of Home Builders reported that its housing market index, which measures builder confidence in the sales of new, single-family homes, rose by three points in October. It was the first time that the measure had risen since June, which came shortly after the end of a federal tax rebate for first-time homebuyers.
This is a busy week for investors, with 113 stocks in the Standard and Poor's 500 Index reporting earnings. After the bell, Apple Inc. reported a 70 percent gain in net income, but its revenues came in short of analysts' expectations. IBM Corp.'s income rose 12 percent, but the value of its services contracts declined. Shares of both tech companies fell in after-hours trading.
The stock market is up more than 3 percent this month, which is leading some investors to conclude that traders are buying on any sign of good news. "It seems like these days that every little bit of good information, no matter how materially irrelevant, is something that the market latches on to," said Peter Zuger, the manager of the Touchstone Mid-Cap Value fund.
Traders are anticipating that the Federal Reserve will soon initiate a program to buy more bonds, which would drive interest rates down and make stocks more attractive.
The Dow Jones industrial average rose 80.91, or 0.73 percent, to 11,143.69. The shares of 24 of the 30 stocks that make up the index rose during the day, with IBM and Exxon Mobil Corp. among the measure's top gainers.
The Standard & Poor's 500 index rose 8.52, or 0.72 percent, to 1,184.71, while the Nasdaq composite index rose 11.89, or 0.48 percent, to 2,480.66.
In other earnings reports, Halliburton Co.'s profit rose. But its revenue fell short of expectations, sending its shares lower. The oil services company has been hampered by a ban on drilling in the Gulf of Mexico.
Citigroup rose 22 cents, or 5.6 percent, to $4.17. Wells Fargo rose $1.29, or 5.4 percent, to $24.87. JPMorgan rose $1.05, or 2.8 percent, to $38.20.
Apple rose $3.26 cents to $318.00. Apple shares surged above the $300 level for the first time last week and are up 12 percent for the month.
Halliburton shares fell $1.73, or 4.8 percent, to $34.09, while IBM rose $1.77 cents to $142.83.
Bond prices rose slightly. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.51 percent from 2.57 percent late Friday. Its yield is often used as a benchmark to set interest rates on mortgages and other loans.
Trading volume on the floor of the New York Stock Exchange came to 4.5 billion shares, where two stocks rose for every one that fell.