NEW YORK (Reuters) – U.S. stocks mostly rose by late afternoon trade on Monday, with financial shares taking the lead as investors shrugged off Europe’s election results that cast doubt on the region’s ability to tackle its debt crisis.
Financial stocks, normally highly sensitive to events that could unsettle the euro zone’s fiscal stability, were not only the biggest gainers but had the heaviest volume. The S&P 500 financial sector index .GSPF was up 0.8 percent. Bank of America (BAC.N) shares shot up 3 percent to $7.97 and Goldman Sachs GS. rose 1.2 percent to $110.29.
Analysts pointed to a potential government bailout for troubled Spanish bank Bankia (BKIA.MC) as a boost for the sector.
The gains also came after Wall Street ended its worst week this year on Friday.
“The S&P 500 failed to hold above its 1,395 breakout point last week and will look to hold its April 1,360 low in the coming days to weeks,” said Ari Wald, a technical analyst at Brown Brothers Harriman.
“A failure to hold 1,360 would confirm lower highs and lower lows for the first time since October.”
The Dow Jones industrial average .DJI was down 4.73 points, or 0.04 percent, at 13,033.54. The Standard & Poor’s 500 Index .SPX was up 3.04 points, or 0.22 percent, at 1,372.14. The Nasdaq Composite Index .IXIC was up 7.86 points, or 0.27 percent, at 2,964.20.
At mid-afternoon, the Dow turned positive and rose above 13,043. But that gain quickly faded and the Dow inched lower again.
The election results from Europe initially roiled futures markets on Sunday night, but markets were able to rebound. Greeks voted to cast out ruling parties in elections on Sunday, dealing a blow to the fragile political consensus that has kept Europe’s currency bloc intact through more than two years of crisis.
In France, Socialist Francois Hollande won the presidency over incumbent Nicolas Sarkozy, raising pressure on Germany to pursue a more growth-oriented approach to the regional crisis.
In the biotech sector, Vertex Pharmaceuticals Inc (VRTX.O) soared 54.5 percent to $57.80 after data from a mid-stage study showed the company’s cystic fibrosis drug Kalydeco, when combined with its experimental treatment for the disease, led to significant improvement in lung function. The NYSEArca biotech index .BTK climbed 3.7 percent.
As the earnings season draws to a close, 420 S&P 500 companies had reported results as of Monday morning, with 67.6 percent exceeding estimates, according to Thomson Reuters data. In contrast, more than 80 percent had beaten expectations at the start of the season.
Cognizant Technologies Solutions Corp (CTSH.O) slid 18.9 percent to $56.48 as the biggest drag on the S&P 500, after cutting its profit and revenue outlooks.
PepsiCo (PEP.N) climbed 1.2 percent to $66.69 after Morgan Stanley upgraded its view on the U.S. beverage industry to “attractive” and raised PepsiCo Inc (PEP.N) to “overweight” from “equal weight.
(Reporting by Angela Moon; Editing by Jan Paschal)
