US stocks rose for a fifth day in a row on Monday after Barclays joined other major banks in saying it had a strong start for 2009, fuelling hopes that the beaten-down sector may be stabilising. The Nasdaqs gains were limited, however, as some investors pulled money out of semiconductor and biotech shares to pour some funds into recently beaten-down financial stocks.
An index of semiconductor stocks fell 2.2 percent, with dominant chip maker Intel down 2 percent at $14.41. Banking shares got a lift after British bank Barclays Plc said it had a "strong start" to 2009, and also confirmed it had discussed selling its iShares unit, in a move that could help it avoid giving a stake to the British government. The comments echoed those made by Bank of America Corp, J.P. Morgan and Citigroup Inc last week.
Citi shares jumped about 42 percent to $2.53. "There is definitely a feeling that the banks are shoring up," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets, in Cleveland. "The other part is that the stocks have just been so beaten up, theyre looking for signs of when the banks are going to start making money again." The Dow Jones industrial average rose 133.37 points, or 1.83 percent, to 7,356.35. The Standard & Poors 500 Index gained 13.76 points, or 1.82 percent, to 770.31.
The Nasdaq Composite Index added 1.15 points, or 0.08 percent, to 1,432.65. A higher close for the Dow industrials and the S&P 500 would mark a five-day streak of gains for both indexes, not seen since the last week of November 2008. That said, the S&P 500 is down around 15 percent in 2009 and close to 50 percent from highs reached in October 2007.
Comments from Federal Reserve Chairman Ben Bernanke added to the positive tone after he said during an interview on the CBS program "60 Minutes" on Sunday that the US recession could probably come to an end this year and "well see recovery beginning next year." Financial stocks were also lifted by news that the Financial Accounting Standards Board, which sets US accounting rules, proposed to give more leeway on mark-to-market accounting rules.
Mark-to-market accounting has forced financial institutions to write down billions of dollars in assets. The KBW bank index shot up 7.5 percent after last weeks advance of 37.4 percent, while Bank of America gained 20 percent to $6.91 and J.P. Morgan added 6 percent to $25.18. On Nasdaq, Microsoft helped lead the way up, gaining 0.4 percent to $16.71. But in the biotech sector, Gilead Sciences lost 1.4 percent to $44.79 on Nasdaq.