Inside Financial Markets

U.S. stocks: Dow closes above 17,000

dow 17000U.S. stocks: Dow closes above 17,000

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 -0.12%   and Goldman Sachs Group Inc. GS +0.33%

The S&P 500 SPX +0.48%  closed 9.53 points, or 0.5%, higher at 1,977.10. The Dow Jones Industrial AverageDJIA +0.66%  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 COMP +0.57% 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 +0.06% : 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 +0.12%  tacked on 2.7% following news of the drug company’s plan to buy a portion of Abbott Laboratories’ ABT +1.26%  generics business in a deal valued at $5.3 billion.

Apple Inc. AAPL +0.18% : shares rallied 1.7% after analysts at Barclays and Morgan Stanley lifted their target price on the stock to $110.

Tesla Motors Inc. TSLA +0.13% : China will require at least 30% of government vehicles to be electric , according to Barron’s.

Newmont Mining Corp. NEM -2.35% : Gold prices tumbled after notching their sixth straight weekly gain, dragging down miners.

In the commodities market, crude oil futures CLQ4 -0.13%  settled marginally higher after logging a third consecutive weekly decline. Gold futures GCQ4 +0.22%  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 JP:NIK +0.64% ending up by 0.9%. European stocks XX:SXXP +0.86%  rose for a second straight day on Monday as fears about the soundness of Portuguese banks continued to recede.

 

Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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