Banks boost Wall Street | The Mesh Report

Banks boost Wall Street

the Mesh Report Staff September 13, 2010 0

By Leah Schnurr

NEW YORK (Reuters) – Stocks rose on Monday, with the S&P 500 breaking through its 200-day moving average on upbeat Chinese factory data, as financial stocks gained after new global banking rules allowed for extended deadlines for raising capital.

Another acquisition in the technology sector added to the positive tone, with indexes eyeing a fourth straight winning session, and the eighth day of gains out of nine for the S&P 500 and Dow. With Monday’s advance, all three indexes were in positive territory for the year.

Global regulators agreed Sunday to force banks to more than triple top-quality capital reserves in hopes of preventing another credit crisis. But the new rules, known as “Basel III,” provide transition periods that could extend to January 2019 or later — more time than many bankers expected.

Banks led the way up, with JPMorgan Chase & Co (JPM.N) rising 3.7 percent to $41.22, while Bank of America Corp (BAC.N) rose 3.4 percent to $14.01. The Select Sector Financial SPDR (XLF.P) added 2.1 percent to $14.84.

It was the first time since early August that the S&P 500 surpassed its 200-day moving average. The market has traded in a tight range in recent months, and investors will be looking for a definitive break-out to see if the market can manage a new leg up.

“This is a market that’s really struggled to get out of this trading range of around 1,025 to 1,125 on the S&P 500,” said Craig Peckham, equity trading strategist at Jefferies & Co in New York.

“If we’re able to actually hold and extend gains from here, that could certainly be a bit of a confidence builder for people who have gotten accustomed to this market really failing around these levels.”

The Dow Jones industrial average (.DJI) gained 89.23 points, or 0.85 percent, to 10,552.00. The Standard &Poor’s 500 Index (.SPX) rose 12.12 points, or 1.09 percent, to 1,121.67. The Nasdaq Composite Index (.IXIC) climbed 32.32 points, or 1.44 percent, to 2,274.80.

Chinese factories ramped up production in August, data showed, while a key measure of money growth easily topped expectations. The data built on recently improved sentiment in U.S. markets as worries eased over whether the economy was headed back into recession.

Hewlett-Packard Co (HPQ.N) said it would buy cybersecurity company ArcSight Inc (ARST.O) for $1.5 billion, the latest in a series of technology-sector transactions. ArcSight surged more than 25 percent to $43.91, while HP edged up 0.2 at $38.27.

(Editing by Jeffrey Benkoe)

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