Wall Street rose on Monday, but major averages gave up some of their gains as bank stocks came under renewed pressure. Stocks had come under heavy selling pressure in recent weeks on growing fears of recession and the possible spread of the eurozone's sovereign debt crisis. Bank of America shares were down 6 percent to $6.53. Late last week, Chief Executive Brian Moynihan sent a memo to senior executives outlining plans to cut another 3,500 jobs.
"The ground zero of all worries is financials," said Charlie Smith, chief investment officer at Pittsburgh-based Fort Pitt Capital Group. Among the issues boosting the S&P 500 were Apple Inc and IBM, which all have appeal for investors seeking stocks prized for strong growth potential despite economic conditions.
"The rebound is pretty much focused on buying into some of the safer issues," said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco. "There's value in the market, but very little faith in the government in dealing with the (US) debt problem," he said. "People are sticking to the big names. No one is taking on added risk."
The Dow Jones industrial average was up 32.31 points, or 0.30 percent, at 10,849.96. The Standard & Poor's 500 Index was up 0.99 point, or 0.09 percent, at 1,124.52. The Nasdaq Composite Index was down 0.91 point, or 0.04 percent, at 2,340.93. US crude futures rose 2.3 percent on a rebound in equities, even as Brent crude fell 1 percent on expectations Libyan oil exports might resume after the civil war ends. Libyan rebels swept into the heart of Tripoli and met scattered resistance.
The rise in US crude helped lift the S&P energy index by 1.2 percent. Among major energy advancers, Exxon Mobil shares advanced 0.6 percent, while Sunoco Inc stocks climbed 1.2 percent. Tensions in the Middle East and a spike in oil prices contributed to equity weakness earlier this year. The S&P had fallen more than 13 percent so far in August, with volatility shifting the index at least 4 percent for six days over the past two weeks.
Credit Suisse on Monday cut its year-end target for the S&P 500 to 1100 from its previous 1275 level. US equity strategist Doug Cliggott cited expectations of a lower medium-term earnings profile and little hope for price-earnings multiples to expand. Investors looked ahead to a speech by US Federal Reserve Chairman Ben Bernanke on Friday at the central bank's annual meeting in Jackson Hole, Wyoming. Some investors hope the Fed will announce new stimulus after the central bank promised earlier this month to keep interest rates near zero for at least two more years, and said it would consider further steps to help growth.
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