New York: US 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 jumped 8.9% to $4.02 on the New York Stock Exchange and Zions Bancorporation soared 13% to $12.65 on the Nasdaq, while the KBW Bank Index rose 3.1%.
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 US home construction index shot up 4.3% after data showed US 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% each over the past two weeks.
The Dow Jones industrial average rose 15.27 points, or 0.17% to close at 9,108.51. The Standard & Poor’s 500 Index gained 2.92 points, or 0.30% to 982.18. The Nasdaq Composite Index added 1.93 points, or 0.10%, 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 fell 1.6% to $31 after the company reported second-quarter earnings that fell from a year ago.
After the closing bell, shares of Amgen Inc rose 3.2% to $62.72 as the biotechnology company raised its full-year earnings forecast and reported a better-than-expected quarterly profit. Amgen said its results were helped by strong sales of its rheumatoid arthritis drug and a tax benefit. The stock closed on Nasdaq at $60.77, down 0.25% or 15 cents, before the release of the results.