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Upbeat bank earnings push Wall Street higher

Upbeat news for banks and homebuilders pushed the stock market broadly higher Monday, extending its gains for the month.
/ Source: The Associated Press

Upbeat news for banks and homebuilders pushed the stock market broadly higher Monday, extending its gains for the month.

Better-than-expected results from Citigroup Inc. drove financial stocks up by more than 2 percent, halting a recent slide brought on by questions into how banks have handled foreclosures. The Dow Jones industrial average gained 81 points.

Citigroup said fewer of its customers defaulted on loans, an encouraging sign that borrowers may be returning to financial health. Citi's shares rose 5.6 percent, lifting shares of other banks along with it including Wells Fargo & Co. and JPMorgan Chase & Co. Bank shares had swooned last week as fallout spread from accusations that banks had improperly processed large amounts of foreclosures.

Investors will be turning their attention to corporate earnings this week as dozens of large companies report their results. Broad economic reports have been the main factor driving stock trading in recent months.

"Earnings will be at the forefront," said Mike Schenk, vice president of economics and statistics at the Credit Union National Association. "Underlying that will be any information we get out of the consumer sector."

Schenk said that the health of the consumer will likely be more apparent in earnings outlooks from consumer goods companies and Thursday's weekly unemployment report.

Apple Inc.'s results will be seen as an indicator of how much appetite consumers have for new gadgets. The iPod and iPad have been popular this year even as shoppers cut back spending elsewhere.

The National Association of Home Builders reported that its housing market index, which measures builder confidence in the sales of new, single-family homes, rose by three points in October. It was the first time that the measure had risen since June, which came shortly after the end of a federal tax rebate for first-time homebuyers.

The stock market is up more than 3 percent this month, which is leading some investors to conclude that traders are buying on any sign of good news. "It seems like these days that every little bit of good information, no matter how materially irrelevant, is something that the market latches on to," said Peter Zunger, the manager of the Touchstone Mid-Cap Value fund.

The Dow Jones industrial average rose 80.91, or 0.73 percent, to 11,143.69.

The Standard & Poor's 500 index rose 8.52, or 0.72 percent, to 1,184.71, while the Nasdaq composite index rose 11.89, or 0.48 percent, to 2,480.66.

In other earnings reports, Halliburton Co.'s profit rose. But its revenue fell short of expectations, sending its shares lower. The oil services company has been hampered by a ban on drilling in the Gulf of Mexico.

IBM Corp. announces its results after the closing bell. IBM's earnings report will be studied for clues about whether companies are spending more to upgrade technology and computers. Signs that companies are ramping up technology spending would be a good indication that they expect business to pick up.

Citigroup rose 22 cents, or 5.6 percent, to $4.17. Wells Fargo rose $1.29, or 5.4 percent, to $24.87. JPMorgan rose $1.05, or 2.8 percent, to $38.20.

Apple rose $3.26 cents to $318.00. Apple shares surged above the $300 level for the first time last week and are up 12 percent for the month.

Halliburton shares fell $1.73, or 4.8 percent, to $34.09, while IBM rose $1.77 cents to $142.83.

Bond prices rose slightly. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.50 percent from 2.57 percent late Friday. Its yield is often used as a benchmark to set interest rates on mortgages and other loans.