U.S. stocks rebounded from three days of losses on Monday, led by banks after regulators announced global capital rules that investors viewed as less as onerous as previously anticipated.
Financials, which have been pressured by the euro-zone sovereign debt crisis, were among the biggest gainers, with the S&P financial index <.GSPF> up 1.2 percent.
Shares of Bank of America Corp
On Saturday, global banking regulators in Basel agreed that the biggest banks globally will need to boost their ratios of common equity to risk-weighted assets by up to 2.5 percentage points, less than the 3 percentage points some investors had feared.
The numbers were not as onerous as people thought... They could have been more severe, said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
The rules meant the banks could have more funds available to reward shareholders through dividends and buybacks.
The Dow Jones industrial average <.DJI> was up 108.08 points, or 0.91 percent, at 12,042.66. The Standard & Poor's 500 Index <.SPX> was up 10.72 points, or 0.85 percent, at 1,279.17. The Nasdaq Composite Index <.IXIC> was up 32.14 points, or 1.21 percent, at 2,685.03.
Monday's gains followed three days of losses. Although investors bet Greece would take action this week needed to avoid a debt default, the absence of a firm plan limited the market's upside.
The Greek parliament will begin to debate a deeply unpopular austerity program that must be approved in order to get the next bailout payment. A Greek minister warned of catastrophe if the measure was not passed.
Also helping to ease tensions, French President Nicolas Sarkozy said his government had an agreement with French banks on rolling over Greek debt into new 30-year bonds.
The fact the benchmark S&P 500 index was holding above its 200-day moving average of around 1,260 was seen as a sign of technical support after two months of heavy selling that dragged the index down about 7 percent.
There's still a lot of fear out there, but the absence of bad news over the past few days, coupled with the selloff late Friday, is creating a bounce now, said Mitch Rubin, chief investment officer at RiverPark Advisors in New York.
In economic news, U.S. consumer spending stagnated in May, according to a government report, while a reading on Midwest manufacturing rose slightly. But stock futures barely moved after the data.
Bristol-Myers Squibb Co
(Reporting by Angela Moon and Ashley Lau; Editing by Kenneth Barry)