From The Associated Press
NEW YORK —
Stocks rose on Monday after a strong gain in retail spending suggested that consumers could be getting more confident about the economy. Bank stocks rose broadly after Citigroup delivered a strong earnings report.
The Dow Jones industrial average was up 87 points at 13,415 in afternoon trading. The Standard & Poor’s 500 index was up nine points at 1,437. The Nasdaq composite index rose 14 points to 3,058.
Companies that rely on consumer spending, like Lowe’s, TJX Cos. and Yum Brands, rose after the government reported that retail sales rose 1.1 percent in the U.S. last month. The Commerce Department also revised August growth up to 1.2 percent, marking the two largest gains since October 2010.
Sales rose in most major categories. Electronics and appliances jumped 4.5 percent with help from the new iPhone. Sales at auto dealers increased 1.3 percent. Building materials and garden supplies, furniture and clothing sales all gained, too.
“The retail sales numbers tell us that the economy in general, and consumer spending in particular, probably did better than most expected in the third quarter,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
Citigroup rose $1.75, or 5 percent, to $36.50 after beating beat Wall Street earnings estimates.
Most other financial stocks followed Citi higher. Bank of America rose 2.6 percent, and JPMorgan Chase rose 1.5 percent. However, Wells Fargo continued to struggle after reporting a record profit on Friday. Analysts warned it might have trouble making money on interest payments for loans. Its stock fell 1.3 percent on Monday, after dropping on Friday, too.
Economic figures from China helped support markets in Europe at the start of a week that could offer greater clarity on the economic fates of Greece and Spain.
China’s inflation rate fell to 1.9 percent in September from 2 percent the month before, reinforcing investor hopes for more stimulus in the world’s second-largest economy.
Good news for two major drugmakers boosted pharmaceutical stocks and pushed the whole health sector to the biggest gains among 10 industry groups in the S&P 500.
Eli Lilly said a potential stomach cancer treatment met goals for improved patient survival. It hasn’t yet submitted the drug, ramucirumab, for government approval.
And Abbott Laboratories said an experimental drug regimen cured 99 percent of patients with hepatitis C. Patients in the trial had genotype 1 hepatitis C, the most common type in the Western world, and the hardest to treat.
Eli Lilly rose $2.01, or 4 percent, to $52.46. Abbott rose $2.65, or 3.8 percent, to $71.91. Other drugmakers also rose. Pfizer, Johnson & Johnson, and Merck were each up more than 1 percent and Bristol-Myers Squibb rose 2.6 percent.
Telecommunications stocks were the only declining industry among the 10 in the S&P 500.
Travel deals website operator Travelzoo Inc. fell again after warning on Friday that its poorly-performing hotel search business will hurt third-quarter results. On Monday, its stock was down 86 cents, or 4.3 percent, to $19.16.
Home health care provider Amedisys Inc. fell $1.35, or 10.1 percent, to $11.98 after saying revenue from health insurer Humana Inc. will shrink.
Investors sold government bonds and drove yields slightly higher. The yield on the 10-year U.S. Treasury note rose to 1.67 percent from 1.66 percent Friday.
The price of crude oil fell a penny to finish at $91.85 on the New York Mercantile Exchange.