US stocks gained on Monday in a holiday-shortened session, lifted by positive news about Citigroup Inc that helped financial sector shares and increased optimism about the interest-rate outlook.
Citigroup's Chairman and Chief Executive Charles Prince rejected the idea of breaking up the financial services giant, according to a report in the latest edition of the financial weekly Barron's. Shares of Bank of America Corp and other financial services companies also rose.
An S&P index of financial services stocks climbed 1.1 percent.
Analysts said investors remained upbeat about interest rate outlook after last week's Federal Reserve meeting.
"We're still digesting the Fed's comments from last Thursday, and the bullishenesss that was set off from the Fed's relatively dovish comments is still prevalent in the market today," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.
The Dow Jones industrial average was up 77.32 points, or 0.69 percent, at 11,227.54. The Standard & Poor's 500 Index was up 9.23 points, or 0.73 percent, at 1,279.43. The Nasdaq Composite Index was up 14.44 points, or 0.66 percent, at 2,186.53.
The New York Stock Exchange and the Nasdaq will close at 1700 GMT on Monday for the July 4 Independence Day holiday. Trading will resume at regular hours on Wednesday.
Last week, the Federal Reserve raised its benchmark federal funds rate on Thursday by a quarter-percentage point to a five-year high of 5.25 percent, as expected, but toned down previous warnings about inflation and the possible need for further increases.
Fed fund futures, however, are still showing a 68 percent chance of a rate hike in August.
Barron's said if Citigroup's stock price remains sluggish, there could be calls for the company to be broken up or Prince to be replaced. But Prince, Citigroup's chairman and CEO, rejected the notion of a breakup, calling it "the dumbest idea I've ever heard of," according to Barron's.
Shares of Citigroup, a Dow component, rose 1.5 percent to $48.96, while Bank of America shares gained 1.9 percent to $49.01. Both stocks helped bolster the S&P 500.
"When you get the biggest name in the sector stronger, people are going to follow into the other names," James said.
Shares of Alcoa Inc, a Dow component and the world's largest aluminium producer, rose 2.8 percent to $33.26. Analysts said the company is ripe for take-over, and see Australian resource companies BHP Billiton Ltd/Plc. and Rio Tinto Ltd/Plc. as likely predators.
Among decliners, Wal-Mart Stores Inc slid 1.3 percent to $47.53. Wal-Mart, the world's largest retailer, estimated on Saturday that June sales rose 1.2 percent at its US stores open at least a year, the low end of its forecast.
Comments
Comments are closed.