By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rebounded on Monday with
the Dow Jones Industrial Average closing above 17,000 as a flurry
of deal news and better-than-expected earnings from Citigroup Inc
increased demand for equities.
The banking heavyweight's profit topped estimates, even as it
reached a $7 billion settlement with the U.S. Justice Department
over shoddy mortgage-backed securities. Citigroup shares climbed
3%, lifting shares of other banks such as J.P. Morgan Chase &
Co (JPM) and Goldman Sachs Group Inc. (GS).
The S&P 500 (SPX) closed 9.53 points, or 0.5%, higher at
1,977.10. The Dow Jones Industrial Average (DJI) scaled an intraday
record high, but retreated slightly in the afternoon to close
111.61 points, or 0.7%, higher at 17,055.42. The Nasdaq Composite
(RIXF) gained 24.93 points, or 0.6%, to 4,440.42.
Read the recap of MarketWatch's live blog of today's
stock-market action.
"This market has defied all odds and we are seeing a classic
18-month-long climb up the wall of worry, said Vince Lowry, CEO of
RevenueShares.
"We expect the second half to be choppy and a 5-10% pullback
would be healthy. However, the issue right now is that there are no
sellers, as people do not want to miss out on the rally," Lowry
added.
The pace of the second-quarter earnings season will move into
high gear this week with results due from large companies in the
financial and technology sectors, the two largest sectors in the
S&P 500 index.
Citigroup Inc. (C): The bank said it would pay $7 billion to
settle claims regarding sales of mortgages before the financial
crisis. The company also beat consensus forecasts for
second-quarter earnings and revenues. Shares rose 3.2%.
The banking sector and "valuations are going to remain the main
focus for this week, as we will get the earnings from some of the
biggest tycoons of Wall Street," said Naeem Aslam, chief market
analyst at AvaTrade, in a note. "The expectations are high, and
investors are hoping that these earnings will cement the optimism
that growth is on track in the U.S. and that revenues are
healthy."
Monday lived up to its merger day status, with a flurry of
companies announcing deals.
Mylan Inc. shares (MYL) tacked on 2.7% following news of the
drug company's plan to buy a portion of Abbott Laboratories' (ABT)
generics business in a deal valued at $5.3 billion.
Apple Inc. (AAPL): shares rallied 1.7% after analysts at
Barclays and Morgan Stanley lifted their target price on the stock
to $110.
Tesla Motors Inc.(TSLA): China will require at least 30% of
government vehicles to be electric, according to Barron's.
Newmont Mining Corp.(NEM):Gold prices tumbled after notching
their sixth straight weekly gain, dragging down miners.
In the commodities market, crude oil futures(CLQ4) settled
marginally higher after logging a third consecutive weekly decline.
Gold futures(GCQ4) saw their biggest daily drop of 2014 Monday as
solid gains for stocks and lackluster physical demand for the
precious metal prompted investors to book profits on recent
gains.
Asian stocks overnight finished broadly higher, with Tokyo's
Nikkei Average ending up by 0.9%. European stocks rose for a second
straight day on Monday as fears about the soundness of Portuguese
banks continued to recede.
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