By Kate Gibson
U.S. stocks on Monday closed higher for a third straight
session, with FedEx Corp.'s improved outlook and a break from
disappointing economic data helping lift the Dow industrials back
into positive territory for the year.
"While the first chapter of the recovery did contain some scary
parts, the story should get less frightening as future chapters
unfold," David Kelly, chief market strategist at J.P. Morgan Funds,
wrote in a note.
Helped by a late-session burst that lifted the indexes to their
highs of the day, the Dow Jones Industrial Average (DJI) closed up
100.81 points, or 1%, to 10,525.43. The blue-chip average is now
0.9% higher for the year, marking its first finish above its Dec.
31, 2009, close in five weeks.
Twenty-nine of the Dow's 30 components gained, led by 3% gains
in shares of Pfizer Inc. (PFE) and Bank of America Corp. (BAC).
Wal-Mart Stores Inc. (WMT) was the only decliner, and its shares
fell 1.1%.
The S&P 500 Index (SPX) climbed 12.35 points, or 1.1%, to
1,115.01, with industrials and financials leading gains that
stretched across all 10 industry groups. The index is just a hair
away from positive for the year, off 0.01%.
The Nasdaq Composite Index (RIXF) added 26.96 points, or 1.2%,
to 2,296.43, notching a 1.2% gain for the year.
For every stock on the decline, more than four were rising on
the New York Stock Exchange, where volume topped 1 billion shares,
or 81% of the exchange's one-month average.
After the major U.S. stock indexes slipped at the open, stocks
turned higher after government data showed that new-home sales
rebounded 23.6% in June. .
"The headline pace is a little better than expected, and that
could give stocks some further upside momentum after good earnings
news from FedEx," said analysts at Action Economics.
Also bolstering sentiment, FedEx (FDX) on Monday raised its
profit forecast for the first quarter and full year, citing
better-than-expected growth in shipping volumes. Its shares were up
5.6%. .
U.S. stocks soared last week, as second-quarter corporate
results have so far largely yielded robust earnings and outlooks.
Economic reports, however, have produced a more mixed picture of
the recovery, so Monday's housing data from the Commerce Department
proved a welcome change.
Builders rally
Home builders fared well in the wake of the sales report, with
PulteGroup Inc. (PHM) up 4.7%, D.R. Horton Inc. (DHI) gaining 3%
and Hovnanian Enterprises Inc. (HOV) ahead 6.5%. Also, shares of
Beazer Homes USA Inc. (BZH) were up 6.2% and Lennar Corp. (LEN)
climbed 3.3%.
International Business Machines Corp. (IBM) shares lagged,
ending up 0.02% after the European Union launched a probe against
IBM, reviving allegations that the company took unfair advantage of
its dominant position in the mainframe computer market.
IBM rejected the allegations, while blaming Microsoft Corp.
(MSFT) and other rivals for arousing the EU action.
BP PLC's (BP) U.S. shares gained 4.9% after media reports said
its Chief Executive Tony Hayward will step down from his post in
October, and ahead of quarterly results scheduled for release
Tuesday. The oil company is likely to take a big charge to cover
cleanup costs in the Gulf of Mexico.
In Europe, markets climbed modestly as investors overseas had
their first chance to react to tests measuring the health of 91 of
the continent's banks.
Gold futures edged down to finish at $1,183.10 an ounce, while
crude-oil futures ended flat at $78.98 a barrel on the New York
Mercantile Exchange.