Stress-Test Results Boost Stocks

U.S. stocks rose last week, erasing the year-to-date loss in the Standard & Poor's 500-stock index, as results from the government's "stress tests" of major banks reassured investors and the Labor Department said the pace of job cuts slowed in April.

Bank of America and Citigroup helped drive financial stocks in the S&P 500 to a 23 percent gain as the government said only one of the 19 large banks that were reviewed was likely to need additional taxpayer aid. Energy stocks gained as oil reached a six-month high of $58.69 a barrel on economic data, including improved home-sales numbers, that suggested the recession has eased.

The S&P 500 jumped 5.9 percent, to 929.23, last week. The 37 percent increase since the index fell to a 12 1/2 -year low March 9 is the biggest over a similar span since the 1930s. The Dow Jones industrial average rose 4.4 percent, to 8574.65. The Nasdaq composite index climbed 1.2 percent, to 1739.00, with its rise limited by Nvidia's profit margin and Symantec's sales forecast disappointing investors.

"The macroeconomic data suggests that the worst is over," said Quincy Krosby, chief investment strategist at the Hartford. "There's been a healing process in the banking sector."

Sixty-seven percent of S&P 500 companies that have reported first-quarter results beat the average analyst profit estimate, even as earnings declined 35 percent from a year earlier. The seventh straight period of declining profits is the longest streak on record.

Yields on Treasurys climbed as the government sold $71 billion in securities. The 10-year note's yield touched 3.38 percent, the highest since November.

The Treasury will auction $31 billion of three-month bills and $29 billion of six-month bills tomorrow. They yielded 0.15 percent and 0.30 percent, respectively, in when-issued trading. One-month bills will be sold Tuesday.

-- Bloomberg News