Stocks rose slightly on Monday in a late rally as investors rotated into financial shares, which had lagged in the recent two-week run-up.
Upbeat data on new home sales underpinned financial stocks, the session's strongest sector, and prompted investors to snap up the shares of several regional banks, which had been among the worst hit by credit losses tied to a weak housing market.
Regions Financial Corp
Financials had lagged in the previous weeks, but Friday saw the beginning of a rotation into the sector and out of technology, which continued Monday, according to Michael James, senior trader at Wedbush Morgan in Los Angeles.
The Dow Jones U.S. home construction index <.DJUSHB> shot up 4.3 percent after data showed U.S. new home sales posted their biggest monthly gain in eight years in June, suggesting the housing market may be starting to recover from its worst slump since the Great Depression of the 1930s.
Stronger-than-expected earnings, coupled with upbeat economic data, have lifted indexes recently, giving stocks their best two-week run since just after the S&P 500 hit a 12-year closing low in the beginning of March. The three major indexes rose about 11 percent each over the past two weeks.
The Dow Jones industrial average <.DJI> rose 15.27 points, or 0.17 percent, to close at 9,108.51. The Standard & Poor's 500 Index <.SPX> gained 2.92 points, or 0.30 percent, to 982.18. The Nasdaq Composite Index <.IXIC> added 1.93 points, or 0.10 percent, to end at 1,967.89.
There was a little more willingness to bid stocks up two weeks ago on positive earnings surprises, said Wedbush Morgan's Michael James. You're seeing people less willing to do that now, given the move the market has had in the last two weeks.
Shares of Dow component Verizon Communications
Aetna shares shed 2.7 percent to $25.72 after the company, one of the biggest U.S. providers of employer-based health insurance, cut its full-year outlook, citing higher-than-projected medical costs.
AMGEN JUMPS AFTER THE BELL
After the closing bell, shares of Amgen Inc
In the regular session, volume was light on the New York Stock Exchange, where about 1.04 billion shares changed hands, less than last year's estimated daily average of 1.49 billion. On the Nasdaq, about 2.16 billion shares traded, below last year's daily average of 2.28 billion.
Advancers outnumbered decliners on the NYSE by a ratio of 9 to 5, while on the Nasdaq, about 13 stocks rose for every 10 that fell.
(Editing by Jan Paschal)