Stocks up after slide, but caution persists
reuters
By Ellis Mnyandu
NEW YORK (Reuters) – U.S. stocks edged higher in choppy trade on Monday as investors scooped up shares beaten down in last week’s sell-off, including materials and technology stocks, but caution persisted over plans to curb bank risk-taking.
News that sales of previously owned U.S. homes fell at the fastest pace on record last month underscored concerns about the fragility of the economic recovery. The decline was steeper than expected as help from a government tax incentive faded.
Both the Dow and the Nasdaq were briefly negative before as investors worried about the potential impact of bank restrictions proposed by the Obama administration last week in a gesture to appear tough with Wall Street.
“What’s going on in Washington is creating additional uncertainty. It’s making investors take pause,” said Mike O’Rourke, chief market strategist at institutional brokerage firm BTIG in New York. “The rhetoric that Obama is using is coming out with a very combative tone. Obviously he’s trying to hit that populist nerve … to show he’s doing something for Main Street.”
The backdrop of the White House’s stricter limits on banks was the Democrats’ loss of a 60-vote hold in the Senate after a Republican upset victory in Massachusetts last week. Bank stocks were mostly lower on Monday.
The Dow Jones industrial average (DJI:^DJI – News) gained 54.49 points, or 0.54 percent, to 10,227.47. The Standard & Poor’s 500 Index (^SPX – News) gained 7.18 points, or 0.66 percent, to 1,098.94. The Nasdaq Composite Index (Nasdaq:^IXIC – News) gained 5.03 points, or 0.23 percent, to 2,210.32.
With bellwether Apple Inc (NasdaqGS:AAPL – News) set to post quarterly results after the bell, investors bid up big-cap technology shares, sending the PHLX Semiconductor index (^SOXX – News) up more than 1 percent.
Shares of natural resource companies also rebounded, lifting the S&P materials index (^GSPM – News) up 1 percent. Shares of aluminum company Alcoa Inc (NYSE:AA – News) climbed 0.6 percent to $13.48, while shares of U.S. Steel Corp (NYSE:X – News) jumped 1.3 percent to $55.74.
Investors were also relieved that Federal Reserve Chairman Ben Bernanke appeared to be closer to winning reconfirmation by the Senate after doubts about his receiving a second term surfaced last week, adding to nervousness.
On Friday, U.S. stocks capped their worst three-day slide in 10 months.
(Editing by Kenneth Barry)
Original post here Yahoo Finance
