US stocks rose on Monday as solid results from the No 2 US home improvement retailer, Lowe's Cos Inc, fuelled hopes the recession was easing and consumer spending stabilising. Positive broker comments on Bank of America Corp, up 9.7 percent at $11.71, lifted the financial sector, while a 4 percent jump in oil prices buoyed energy companies' shares.
Bank and energy stocks were the big boosters of the S&P 500. Shares of Lowe's rose 9 percent to $20.11 after the company raised its full-year forecast due to signs that the housing market's decline may be ebbing. Lowe's Chief Executive Robert Niblock said consumer confidence has improved in recent weeks, and housing turnover is showing "signs of a bottom."
That optimism helped lift shares of companies in sectors such as homebuilding and retail. Lowe's top rival Home Depot Inc added 6.5 percent to $25.98 a day before the Dow component is set to deliver its own quarterly scorecard. "We begin to see evidence that we're moving from a slower rate of negative change to positive growth and I think there is more room for this to run on the upside," said Craig Hester, chief executive of Hester Capital Management in Austin, Texas.
The Dow Jones industrial average rose 175.70 points, or 2.13 percent, to 8,444.34. The Standard & Poor's 500 Index gained 18.05 points, or 2.04 percent, to 900.93. The Nasdaq Composite Index added 32.42 points, or 1.93 percent, to 1,712.56. The S&P 500 recently climbed from a 12-year closing low on March 9, rising 37.4 percent through the close on May 8.
But after the benchmark index gave up some ground last week amid concerns about the economy and a flurry of secondary stock offerings the S&P 500 was up 33 percent in Monday's trading. Lowe's quarterly numbers also served as a fresh catalyst for investors eager to sustain the market's rally and offered a sharp contrast to last week's disappointing April retail sales data.
Investors watch retail sales closedly because consumer spending accounts for two-thirds of US economic activity. The Dow Jones US home construction index jumped 5.8 percent, helped by Citigroup's upgrade of Lennar Corp shares to "buy" while an S&P index of retailers' shares climbed 3.9 percent. Lennar's stock surged 12.4 percent to $9.90.
In broker research news, Goldman raised its recommendation on Bank of America's stock to "buy." Separately, Citigroup said it now expects Bank of America will report a second-quarter profit instead of a loss. Shares of Bank of America climbed 8.5 percent to $11.58 on the New York Stock Exchange, driving bank stocks sharply higher.
The KBW Bank index gained 5.4 percent. Shares of Exxon Mobil Corp added 1.9 percent to $70.56, and ConocoPhillips climbed 3.6 percent to $45.53 as US front-month crude rose $2.36, or 4.2 percent, to $58.70 a barrel. The S&P energy index rose 3 percent.
On the Nasdaq, chipmaker Qualcomm Inc up 2.6 percent at $41.78 contributed one of the biggest lifts as the semiconductor sector was bolstered by positive broker comments. The PHLX Semiconductor index rose 2.7 percent. Shares of International Business Machines shot up 2.7 percent to $104.15 and topped the list of the Dow's biggest gainers.
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