U.S. stocks rose to 10-month highs on Monday, led by financial and energy shares as investors extended a four-day string of gains on optimism about economic recovery.
Encouraging comments about a return to growth from Federal Reserve Chairman Ben Bernanke and strong U.S. housing data last week pushed stocks to new 2009 highs, while strong data worldwide pointed to major economies emerging from recession.
The movement today is follow-through from the weekend, said Max Bublitz, chief investment strategist at SCM Advisors in San Francisco. We were up on Friday. Asian and European markets had a chance to follow through on that, and now we're building off them.
Credit card companies rose after Barclays upgraded American Express , Capital One and Discover Financial .
The Dow Jones industrial average <.DJI> gained 62.27 points, or 0.65 percent, to 9,567.55. The Standard & Poor's 500 Index <.SPX> rose 7.42 points, or 0.72 percent, to 1,033.51. The Nasdaq Composite Index <.IXIC> added 10.93 points, or 0.54 percent, to 2,031.77.
Overseas markets were lifted by euro zone data showing new industrial orders rebounded more than expected in June..
The top-performing sectors in the S&P were financial <.GSPF>, up 1.8 percent, and energy <.GSPE>, up 1.7 percent.
Financials, which have been strong since the market bottomed, have continued to rise as investors rotate in, said Paul Nolte, director of investments at Hinsdale Associates in Hinsdale, Illinois.
It's one of the biggest under-owned sectors, and with money going in with government bailouts, you're seeing a lot of benefit over the short term, he added.
The energy sector rose as crude oil prices advanced to a 10-month high on continued economic optimism.
September crude futures rose 1.1 percent to $74.72 per barrel.
Citigroup analysts issued a positive commentary on financial stocks, suggesting opportunity remains in place even after the impressive rally experienced over the past five months.
Drugmaker Warner Chilcott soared 25 percent to $20.15 after it said it would buy Procter & Gamble Co's pharmaceuticals business for $3.1 billion.
American Express rose 1.89 percent to $33.47, Capital One advanced 2.66 percent to $37.35 and Discover Financial rose 3.11 percent to $13.93
Stocks showed little reaction to data from the Federal Reserve Bank of Chicago showing production-related indicators turned positive in July for the first time since October.
(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)