RTTNews - Stocks posted strong gains on Monday, boosted by promising earnings results and reassuring news from commercial lending giant CIT Group (CIT). The major averages kicked off the week on a positive note, finishing in positive territory by solid margins.
In earnings news, Halliburton Co. (HAL), M&T Bank Corp. (MTB), Hasbro (HAS), Eaton (ETN) and Johnson Controls (JCI) all reported quarterly results that largely exceeded Wall Street expectations, bolstering trader optimism.
This morning, some trader concern regarding the bankruptcy of CIT Group was alleviated, as the lending giant reportedly secured $3 billion in financing from some of its largest bondholders.
On the economic front today, the Conference Board released a report showing that its index of leading economic indicators increased by more than expected in June, although both the coincident index and lagging index continued to decline.
The report showed that the leading indicators index increased by 0.7 percent in June following an upwardly revised 1.3 percent increase in May. Economists had expected the index to increase by 0.5 percent compared to the 1.2 percent increase originally reported for the previous month.
In other news, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, predicted modest growth starting in the second half of the year, though he said there is not likely to be a strong recovery in the medium term.
The major averages saw further upside heading into the close, finishing near their best levels of the day. The Dow advanced by 104.21 points or 1.2 percent to 8,848.15, the Nasdaq climbed by 22.68 points or 1.2 percent to 1,909.29 and the S&P 500 rose by 10.74 points or 1.1 percent to 951.13.
Biotechnology, airline and resource stocks saw some of the day's best performances, with gold and steel stocks leading the way higher in the resource sector. The NYSE Arca Biotechnology Index finished up by 16.3 percent, helped by shares of Human Genome Sciences (HGSI), which surged up by 276.8 percent.
Commercial real estate stocks also saw a notable upward move, as reflected by the 3.9 percent gain posted by the Morgan Stanley Real Estate Index. The day's gain helped the index to finish at its best closing level in nearly seven weeks.
The index was helped by shares of Vornado Realty Trust (VNO) and Developers Diversified Realty (DDR), which rose by 7.5 percent and 7.2 percent, respectively.
Railroad, internet, brokerage, housing and electronic storage stocks also posted strong gains, reflecting the day's broad based rally. On the other hand, some health insurance and banking stocks bucked the uptrend.
A majority of the Dow components finished in positive territory, helping the blue chip index to post a triple digit gain on the day.
Caterpillar (CAT) led the way higher in the Dow, climbing by 7.8 percent on the day. The day's gain propelled the stock to its best closing price in over a month.
Further strength was visible in shares of Alcoa (AA) and Disney (DIS), which moved up by 3.7 percent and 3.5 percent, respectively. Alcoa closed at its best level in three weeks, while Disney finished at its highest price in well over two months.
Additionally, Cisco (CSCO) moved higher on the day, with shares of the networking giant posting a gain of 3.1 percent on the session. The day's advance helped the stock to extend its recent winning streak and boosted it to its best closing price in over nine months.
While American Express (AXP), DuPont (DD), United Technologies (UTX) and Boeing (BA) also rose, Bank of America (BAC) was one of three losers in the Dow slipping by 5 percent. Despite puling back for a third straight session, the stock remained stuck in a recent range. Procter and Gamble (PG) and Johnson & Johnson (JNJ) fell by only mild margins.
In overseas trading, stock markets across the Asia-Pacific region closed on the upside Monday, with Hong Kong's Hang Seng Index surging up by 3.7 percent while South Korea's benchmark KOSPI Index posted a gain of 2.7 percent.
The major European markets also closed notably higher, with the German DAX Index and the French CAC 40 Index finishing up by 1 percent and 1.6 percent, respectively. The U.K.'s FTSE 100 Index also rose, posting a 1.3 percent gain on the day.
In the bond markets, treasuries closed notably higher, despite the modest rally in the stock markets. Subsequently, the yield on the benchmark ten-year note finished at 3.585 percent, falling by 6.6 basis points on the day.
Tuesday, the broader markets will have a chance to react to earnings from Texas Instruments (TXN), Boston Scientific Corporation (BSX), and Legg Mason (LM), all of which reported after the close of trading today. Coca-Cola (KO) and Schering-Plough (SGP) will report before the opening bell tomorrow.
Aside from earnings, traders will pay close attention to testimony from the Federal Reserve Chairman Ben Bernanke, who will be speaking before the House Financial Services Committee beginning at around 10:00 a.m. ET.
For comments and feedback: contact email@example.com