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Strong bank earnings
push stocks higher
NEW YORK >> Better-than-expected profits from Citigroup and Bank of America lifted Wall Street yesterday as investors grew more optimistic about a strong economic rebound. A late-day sell-off, however, limited the gains.
The Dow Jones industrials rose as much as 158 points before losing momentum in the final hour of trading. Analysts said it was unclear whether reports of a trading error at the Chicago Mercantile Exchange was behind the drop or if investors opted to turn cautious after the large runup.
"The rally began March 11 and we're now entering the fifth month. On top of that we had a 160 point move -- so it was up, up and away. There might have been an aspect of too much, too soon," said Larry Wachtel, market analyst at Prudential Securities.
The Dow closed up 57.56, or 0.6 percent, at 9,177.15, having gained 0.5 percent last week.
The broader market also finished higher. The Nasdaq composite index gained 20.89, or 1.2 percent, to 1,754.82, following a weekly advance of 4.2 percent. The Standard & Poor's 500 index rose 5.72, or 0.6 percent, to 1,003.86, having gained 1.3 percent.
Advancing issues outnumbered decliners about 9 to 5 on the New York Stock Exchange. Consolidated volume was moderate at 1.83 billion shares, compared with 1.55 billion traded Friday.
The Russell 2000 index, a barometer of smaller company stocks, rose 5.26, or 1.1 percent, to 479.03. The NYSE composite index gained 36.51 to 5,625.30. The American Stock Exchange composite index slipped 0.44 to 972.28.
Dow component Citigroup advanced 97 cents to $47.12 after the nation's largest financial institution reported second-quarter earnings that beat estimates by 3 cents per share. The bank also raised its quarterly dividend to 35 cents from 20 cents.
Bank of America rose 58 cents to $83.46 after it posted quarterly profits that also topped expectations.
Intel, another Dow component, gained 68 cents to $24.02 after Merrill Lynch raised the technology company's stock rating to "buy" from "neutral." The company releases its quarterly earnings report today.
But shares lost some of their early gains after an apparent error in electronic trading in stock index futures. The Chicago Mercantile Exchange was forced to unwind certain trades, and rumors about the error also affected the market, analysts said.
Overture Services climbed $2.54 to $24.05 after Yahoo! agreed to buy the Web-search advertising company in a deal worth about $1.63 billion. Yahoo inched up 1 cent to $32.20.
OfficeMax surged $1.42 to $8.60 after Boise Cascade agreed to buy the office-supplies retailer for nearly $1.2 billion in cash and stock; the deal will double the size of its office products distribution business. Boise Cascade declined $1.56 to $21.87.
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