Monday's mid-afternoon trade: US indices rise on central banks' moves

US stocks rose on Monday after central banks calmed markets by pumping more cash into the global financial system and a report showed US consumers spent more freely than expected last month. The gains suggested stocks could stabilise after several days of high volatility on worsening lending conditions, sparked by repayment problems with US subprime mortgages.
The market also drew strength from news investment bank Goldman Sachs Group Inc and outside investors will pump $3 billion into a hedge fund that had been hammered by recent market turmoil. The move was in contrast to other major banks, which recently shut funds.
"The injections on the part of global central banks are helping to stabilise the market, and Goldman saying it would inject assets into its hedge fund showed there are still opportunities to put money to work," said Owen Fitzpatrick, head of US equity group at Deutsche Bank Private Wealth Management in New York.
"But general concerns around liquidity are not going away overnight and I still think we are in for a volatile market." The Dow Jones industrial average was up 64.22 points, or 0.49 percent, at 13,303.76. The Standard & Poor's 500 Index was up 7.56 points, or 0.52 percent, at 1,461.20. The Nasdaq Composite Index was up 7.73 points, or 0.30 percent, at 2,552.62.
The major indexes briefly pulled back from their early highs after financial stocks - which had opened the session strongly - reversed course as investors remained jittery about losses tied to subprime mortgage troubles. Private equity firm Kohlberg Kravis Roberts & Co said weak debt market conditions could force it to rely on banks' financing commitments to complete deals.
Goldman Sachs shares were down 0.1 percent at $180.26, reversing earlier gains. In another positive development, the outlook for earnings was raised. Second-quarter earnings are now projected to rise 8.6 percent from the year before, compared with an estimate of 7.8 percent last week, according to Reuters Estimates.
Shares of Sears Holdings Corp rose 5.2 percent to $140.01 after it said its board approved the repurchase of up to $1.5 billion in stock and the retailer tightened its earnings outlook. Shares of EMC Corp rose 7.2 percent to $19, as the initial public offering of its VMware unit, which sells software that companies use to manage data centres.