Stocks rallied Monday, with the Dow adding 350 points after positive news about the U.S. housing market, including an upbeat profit forecast from Lowes, as well as an upgrade of Bank of America, encouraged investors to step back into the market after last week's selloff.
The Dow Jones industrial average (INDU) gained 235 points, or nearly 2.8%. The S&P 500 (SPX) index rose 3% to close above 900, bringing the average back into positive territory for the year. The Nasdaq composite (COMP) advanced 3.1%.
Stocks slumped last week after worse-than-expected reports on retail sales, housing and weekly jobless claims put investors on the defensive.
But a big rally in Indian markets helped set Monday's bullish tone early on. The buying gained momentum in afternoon trading with retail and banking shares gaining ground.
"I think we're seeing a bounce after the weakness last week," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. "For investors who think the market is going to continue higher, now might be a good time to get back in at prices that are a bit lower."
Tuesday brings readings on new home construction and building permits in April. Companies reporting quarterly results include Dow components Home Depot (HD, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500).
Housing: Lowe's (LOW, Fortune 500), the No. 2 home-improvement retailer, projected a higher fiscal second-quarter profit after posting a 22% decline in the first quarter that still managed to top analysts' forecasts. Shares rose 8%.
"The housing issue is front and center in the economic recovery," said Quincy Krosby, chief investment strategist at The Hartford. "Lowe's is a major player in that space and their comments are important."
Two private reports helped bolster confidence in the housing market. The National Association of Home Builders said its index of homebuilder confidence rose for the second month in a row. Separately, the NAHB said home prices are at their most affordable in nearly two decades.
Banking: Shares of financial services companies got a boost after Bank of America (BAC, Fortune 500) was upgraded to "buy" by Goldman Sachs (GS, Fortune 500). Analysts said the bank will be able to raise needed capital thanks to gains in mortgage and capital markets activity. BofA gained 10%.
Financial holding company State Street (STT, Fortune 500) announced a $1.45 billion stock offering and said it would also offer non-guaranteed senior notes. The company said it plans to repay its government bailout funds.
Assinar:
Postagens (Atom)
