NEW YORK |
NEW YORK (Reuters) – Stocks rose on Monday, led by bank shares after Greece’s parliament approved reforms needed to qualify for a cash disbursement and avoid an unruly default.
Greek lawmakers backed drastic cuts in wages, pensions and jobs on Sunday as the price of a 130 billion euro ($170 billion) bailout by the European Union and International Monetary Fund.
But unrest in the streets and a voting rebellion by lawmakers of the ruling coalition suggested Greece may be on the brink of massive social unrest, which would make it difficult for Athens to stick to the rescue terms.
The SP 500 last week hit a 7-month high, in part on bets the Greek reforms would pass. The benchmark index traded near the 1,355 level, seen as a resistance point and possible trigger for a pullback.
“Although we’re up, we still haven’t eclipsed the highs we did last week in some of the indexes,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. “It is a sign there was some more enthusiasm on the prospect (of the Greek deal) than on the news.”
The SP 500 is up more than 25 percent from a low in early October. McCain said he is worried that the recent market rally may have outpaced the economic improvement.
“You have to respect the fact the market has been as strong as it has been, but we wouldn’t buy into this strength,” he said.
The Dow Jones industrial average .DJI rose 82.27 points, or 0.64 percent, to 12,883.50. The SP 500 Index .SPX gained 10.12 points, or 0.75 percent, to 1,352.76. The Nasdaq Composite .IXIC added 28.80 points, or 0.99 percent, to 2,932.68.
Financial stocks .GSPF, up more than 1 percent, were among the best performers on the SP 500, and bank shares led gains in Europe. A gauge of European banking stocks .SX7P gained 0.5 percent, and an index of Greek banks .FTATBNK surged 12.3 percent.
On Wall Street, Bank of America (BAC.N) climbed 2.7 percent to $8.29 and is up almost 50 percent this year. Bank shares continue to outperform after having posted deep losses in 2011.
Apple Inc (AAPL.O) raised the stakes in an intensifying global patent battle with Samsung Electronics (005930.KS) by targeting Samsung’s latest model using Google Inc’s (GOOG.O) fast-growing Android software.
Apple shares rose 1.5 percent to $500.95 after reaching a record of $503.83, while Google rose 1.2 percent to $613.26.
Google is expected to win approval from European regulators, as well as from U.S. antitrust authorities, for its planned $12.5 billion purchase of Motorola Mobility (MMI.N), according to people familiar with the matter.
Regeneron Pharmaceuticals Inc (REGN.O) jumped 13 percent to $115.37 after the company significantly raised its 2012 sales forecast for a key eye drug.
As earnings season moves into its final stages, 51 companies in the SP 500 are scheduled to report results this week. According to Thomson Reuters data through Monday, of the 357 companies in the benchmark index that have released results, 64 percent have beaten analyst expectations.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)