Wall Street rises with Citigroup's earnings, retail data

RetailReuters

Stocks advanced on Monday, rebounding from last week's losses after stronger-than-expected Citigroup earnings and retail sales.

Citigroup Inc shares rose 4.2 percent to $36.22 and gave the biggest lift to the S&P 500 after the third-largest U.S. bank reported quarterly adjusted earnings that surged from the year-ago quarter and beat expectations. The growth came as mortgage lending increased and capital markets results rebounded.

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Worries about third-quarter U.S. results have put a damper on stocks in recent weeks, with the S&P 500 posting a decline of 2.2 percent last week - its worst weekly performance in four months.

Both the Dow and the S&P 500 appeared to successfully defend their technical support levels at the 50-day moving average, which last week's declines had left each index on the precipice of breaking below.

Investors remained cautious about Europe, waiting for signs that Spain was ready to formally request a bailout, which is seen as necessary to deal with its debt crisis.

"It's a quiet rally after a little bit of a pullback," said Eric Kuby, chief investment officer at North Star Investment Management Corp. in Chicago.

"There is this continued sense that most money managers are trailing the index. You're not going to catch up if you're sitting in cash, so there continues to be pressure."

The Dow Jones industrial average shot up 70.49 points, or 0.53 percent, to 13,399.34. The Standard & Poor's 500 Index rose 6.18 points, or 0.43 percent, to 1,434.77. The Nasdaq Composite Index gained 6.99 points, or 0.23 percent, to 3,051.11.

Lending further support was a rebound in energy shares as U.S. crude curbed an earlier slide that had pushed the price down below $90 a barrel. The S&P energy index gained 0.2 percent.

Economic data showed September retail sales rose 1.1 percent, above the 0.8 percent growth that had been anticipated. But a survey showed that an index of manufacturing activity in New York state shrank for the third month in a row in October.

Drugmaker shares advanced, led by Eli Lilly and Co , up 3.9 percent at $52.43, and Abbott Laboratories , up 3.3 percent at $71.55. The S&P healthcare index climbed 1 percent.

Eli Lilly shares rose after the drugmaker said a late-stage study of its experimental gastric cancer drug met its main goal of improving overall survival. Abbott's stock gained after results from a mid-stage study of hepatitis C medicines.

Profits of S&P 500 companies are seen dropping 2.4 percent this quarter from a year ago, according to Thomson Reuters data.

With only 7 percent of S&P 500 companies having reported, 60 percent of companies have topped profit expectations - less than the average beat rate of 67 percent for the past four quarters.

(Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)