Banks lead another week of stock market gains
U.S. stocks rose, pushing the Standard & Poor's 500-stock index to a 17-month high, as Citigroup led a rally among banks and report data boosted confidence that the economic recovery is sustainable.
Citigroup rallied 13 percent on speculation that the U.S. government may sell its stake and on chief executive Vikram Pandit's statement that the bank will be consistently profitable.
American International Group, the bailed-out insurer, surged 22 percent as it sold a division to MetLife for $15.5 billion. Home Depot rose 2 percent and McDonald's gained 2.9 percent as a U.S. retail sales report showed an unexpected increased in February.
The S&P 500 climbed 1 percent to 1149.99 last week. It closed at 1150.24 on March 11, the highest level since October 2008, and has now surged 70 percent since its bear-market low on March 9, 2009. The Dow Jones industrial average gained 0.6 percent, to 10,624.69.
"The market forecast an apocalyptic, utopian scenario one year ago, and that proved to be inaccurate," said Stephen Wood, chief market strategist for Russell Investments. "A big percentage of what we've seen over the last year is the market correcting this incorrect forecast.
"We were wrong, and we need to get back to a more accurate pricing of the current environment."
The S&P 500 has risen in nine of the past 11 trading days as reports have showed that the labor market and consumer confidence are improving and as takeovers have bolstered optimism that the economy is gaining strength. The stock index had fallen 8.1 percent between Jan. 19 and Feb. 8 on concern that Greece's budget crisis would throttle the recovery.
-- Bloomberg News