A rebound in consumer spending calmed fears of the new US recession and also helped lift all 10 S&P sectors. Only five S&P stocks ended in negative territory as the CBOE Volatility index, a measure of investor fear, lost 9. 3%. However volume was low, amplifying the surge in shares.
Financial stocks were the very best gainers after Greek banks Alpha and EFG Eurobank sealed a merger along with help from Qatar, shoring up a sector battered by the euro zone's financial debt crisis.
Insurers also rose sharply as property damage from Hurricane Irene was under feared, according to early estimates.
The Greek deal consolidates the number of weak banks in the area and reduces the risk from one potential flashpoint that could reignite the actual smouldering euro zone debt crisis, which has been hanging over the global economic climate. In addition, the foreign investment is a sign that investors view the location as undervalued.
"Many have come to see Greece as a lost trigger, so to have a merger potentially making a strong (bank) in Greece indicates it isn't as dire a situation as might otherwise have been assumed, inch said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Kansas.
With public transport still struggling to return to service in New York on Monday following the area's brush with Hurricane Irene, many Wall Street firms were understaffed, adding to the lightest volume in a month. About 6. 5 billion shares traded about the New York Stock Exchange, the American Stock Exchange and Nasdaq, below final year's daily average of 8. 47 billion.
"The bears stayed home within what remains a wait-and-see market, but the light volume exacerbated the day's proceed, " said Dick Del Bello, senior partner at Conifer Group, a hedge fund company in New York. "That vacuum of light volume is allowing us to increase nicely. "
Among insurers, Dow component Travelers Cos Inc gained 5. 1% in order to $50. 75, while Allstate Corp jumped 8. 5% to $26. 30 as well as Progressive Corp rose 3. 6% to $18. 89. The iShares Dow Jones ALL OF US Insurance Index Fund rose 5. 3%.
The Dow Jones industrial average had been up 254. 71 points, or 2. 26%, at 11, 539. 25. The conventional & Poor's 500 Index was up 33. 28 points, or 2. 83%, from 1, 210. 08. The Nasdaq Composite Index was up 82. 26 factors, or 3. 32%, at 2, 562. 11.
Consumer spending recorded its biggest increase in five months in July, supporting views the economy was not falling back to recession. And while the number of signed contracts for home sales dropped 1. 3% in July, the decline matched forecasts and managed to best year-ago levels.
"Consumer spending has been in focus in the past month or two, so any kind of strength there is a good thing for the economy and also the market, " said Brian Lazorishak, portfolio manager at Chase Investment Counsel within Charlottesville, Virginia.
Traders were also relieved that hurricane damage in New You are able to City, especially in lower Manhattan, was not nearly as bad as have been feared.
The S&P financial index was up 4. 2% and the KBW Banking institutions index added 4. 5%. Bank of America Corp rose 8. 1% in order to $8. 39 and JPMorgan Chase & Co gained 3. 9% to $37. sixty four.
US-listed shares of National Bank of Greece soared 38% to $1. 15, while European shares wound up 1. 3%.
LDK Solar Co LTD rose 5. 8% to $6. eighteen after it forecast third-quarter revenue above expectations.
About 90% of issues traded about the New York Stock Exchange ended in positive territory, while on the Nasdaq, 85% associated with stocks ended higher.