Stocks rose on Monday in a choppy session after influential bank analyst Meredith Whitney upgraded Goldman Sachs Group and sparked hopes corporate quarterly results in the financial sector may be surprisingly strong.
Her comments more than offset investor jitters over a key week for corporate earnings and news that CIT Group Inc
The S&P gauge of the financial sector <.GSPF> rose 2.9 percent.
Goldman, Bank of America and JP Morgan are some of the major financial companies scheduled to post quarterly earnings and outlooks this week.
Bank results could be seen as landing better than expected, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago, adding that the bar was not set too high in the first place.
No doubt we're starting from a pretty low level, he said. We're all looking for any type of good news in the banking sector. They've been the (main) cause of concern here for so long, and anything that improves their outlook is being taken as a good sign for the market.
The Dow Jones industrial average <.DJI> gained 50.03 points, or 0.61 percent, to 8,196.55. The Standard & Poor's 500 Index <.SPX> rose 5.13 points, or 0.58 percent, to 884.26. The Nasdaq Composite Index <.IXIC> added 2.95 points, or 0.17 percent, to 1,758.98.
In news that underscored the fallout from the recession, CIT, the commercial U.S. lender struggling to finance its business, said late on Sunday it remained in discussions with regulators on measures to improve its near-term liquidity.
Separately, the Wall Street Journal reported over the weekend that CIT hired a top law firm to explore a possible bankruptcy filing.
CIT shares fell almost 25 percent to $1.15.
The S&P 500 index has rallied as much as 40 percent from its 12-year low set in early March, but the drive higher wilted in June as investors searched for economic proof to support the rise.
(Additional reporting by Ellis Mnyandu and Edward Krudy; Editing by Padraic Cassidy)