Wall Street posted modest gains Monday as investors found confidence in better-than-expected Bank of America results, soothing jitters about the battered financial sector in the wake of the mortgage meltdown.
However, gains were tempered as oil climbed as much as $3 a barrel amid fresh concerns over Iran. Investors were also digesting news that Yahoo and activist investor Carl Icahn have settled their proxy dispute.
Bank of America reported better-than-expected
earnings, even as it revealed that its profit plunged 41% in the most
recent quarter. The Charlotte, N.C.-based company reported earnings of
$3.41 billion, or 72 cents a share, during the second quarter.
Shares of Bank of America were up nearly 11%.
Other banks have reported better-than-expected financial results recently. Citigroup reported a $2.5 billion quarterly loss Friday, which was actually ahead of Wall Street's grimmer projections. On Thursday, Merrill Lynch reported its fourth straight quarterly loss. JPMorgan Chase and Wells Fargo also reported lower profits, but both banks were ahead of Wall Street's expectations.
Leading indicators The Conference Board announced
Monday that its index decreased for the second consecutive month in
June by 0.1%, in line with a consensus of economists surveyed by
Briefing.com.
Energy prices Oil prices rebounded sharply Monday, following the
largest four-day slide in oil trading history, as traders focused on a
breakdown of nuclear talks with Iran and on Tropical Storm Dolly, which
is making its way into the Gulf of Mexico. Light, sweet crude oil for
August delivery rose 47 cents to $129.35 a barrel.
The Web portal Yahoo announced a settlement with
investor Carl Icahn over its lineup of candidates for board of
directors, including the addition of the activist investor himself.
Yahoo said the board is being expanded to 11 members, one of whom will
be Icahn, along with two other added positions.
Shares of Yahoo slipped by more than 2% in morning trading.
Apple was scheduled to report results after the close. According to
Thomson/First Call's survey of analysts, the electronic products maker
is expected to report net income of $972.6 million, or $1.08 per share,
on sales of $7.4 billion.
Shares of Apple were off slightly in morning trading.
In the bond market, Treasury prices slumped, raising the yield on the benchmark 10-year note to 4.10% from 4.08% late Friday. Bond prices and yields move in opposite directions.
COMEX gold for August delivery rose $4.40 to $962.40 an ounce.