Wall Street claws back as financials lead
(Reuters) - U.S. stocks gained on Monday, helped by relief over Italy maintaining its debt rating, as equities clawed back from a sharp sell off last week.
Financials .SPNY led broad gains among sectors as the benchmark S&P 500 rose more than 1 percent.
Shares of software maker Red Hat Inc (RHT.N) gave among the biggest boosts to the S&P 500, surging 45.3 percent after the company agreed to be bought by IBM Corp (IBM.N) for $34 billion. IBM shares fell 1.9 percent.
Still, stocks had come off their session highs, as investors were wary of any rally given increased volatility over the past month, stemming from higher interest rates and worries about the economy and trade tensions. The S&P last week flirted with correction territory.
“They were so oversold, it invited a bounce,” said Willie Delwiche, an investment strategist at Baird in Milwaukee. “The question is whether or not it can go anywhere.”
The Dow Jones Industrial Average .DJI rose 254.08 points, or 1.03 percent, to 24,942.39, the S&P 500 .SPX gained 34.9 points, or 1.31 percent, to 2,693.59 and the Nasdaq Composite .IXIC added 63.18 points, or 0.88 percent, to 7,230.39.
Investors who are bullish about stocks point to strong corporate earnings and economic strength, although weak housing data has raised some concern about the economy.
Data on Monday showed U.S. consumer spending rose for a seventh straight month in September, but income recorded its smallest gain in more than a year amid moderate wage growth, suggesting the current pace of spending was unlikely to be sustained.
“Many investors are starting to take a step back from all the noise and are looking at the strong fundamentals of the U.S. economy right now,” said Arian Vojdani, an investment strategist at MV Financial in Bethesda, Maryland.
Earlier, relief over Italy dodging a ratings downgrade helped global sentiment and overturned an earlier fall in U.S. stock futures.
Shares of carmaker Ford Motor Co (F.N) rose 5.1 percent, while General Motors Co (GM.N) gained 3.7 percent after Bloomberg reported China was planning to cut the tax levied on car purchases by half.
Advancing issues outnumbered declining ones on the NYSE by a 3.26-to-1 ratio; on Nasdaq, a 2.62-to-1 ratio favored advancers.
The S&P 500 posted 3 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 20 new highs and 54 new lows.
Additional reporting by Shreyashi Sanyal in Bengaluru; Editing by Susan Thomas
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |