Stocks rose to 10-month highs on Monday, extending last week's gains as investors became even more optimistic about signs that major world economies were emerging from recession.
With little new U.S. data on Monday to give the market direction, investors built on upbeat comments last week from Federal Reserve chief Ben Bernanke about the prospects for an economic recovery. Euro zone data on Monday showing industrial new orders rebounded more than expected provided more evidence of recovery.
We had a decent performance last week after a slow start that picked up steam, said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
What we're seeing is follow through from last week's strength.
The Dow Jones industrial average <.DJI> gained 49.35 points, or 0.52 percent, to 9,555.31. The Standard & Poor's 500 Index <.SPX> rose 6.27 points, or 0.61 percent, to 1,032.40. The Nasdaq Composite Index <.IXIC> added 10.24 points, or 0.51 percent, to 2,031.14.
Financial stocks were the best performers, with the S&P financial sector index <.GSPF> rising 1.6 percent. Shares of American Express Co
Further supporting financial stocks, Citigroup said sector stocks were all trading well below their mean relative performance levels, suggesting opportunity remains in place even after the impressive rally experienced over the past five months.
Shares of Advanced Micro Devices
Regarding company news, specialty drugmaker Warner Chilcott's
Shares of energy companies also rose as crude oil futures hit a fresh 10-month high of $74.81 per barrel, supported by expectations that an economic recovery would spur demand for oil. The S&P energy index <.GSPE> gained 1.4 percent.
On the economic data front, the Federal Reserve Bank of Chicago said its National Activity Index was minus 0.74 in July, up from minus 1.82 in June, as production-related indicators turned positive for the first time since October.
At noon, the Chicago Fed will also release its Midwest Manufacturing Index for July. The index read 78.1 in June.
(Editing by Chizu Nomiyama)