NEW YORK (Reuters) – Stocks rose on Monday, with the S&P 500 breaking through its 200-day moving average for the first time since early August on upbeat Chinese factory data and new global banking rules. Indexes pared some early gains as the S&P 500 moved closer to the 1,130 level, which has generally been the top of a recent trading range. Analysts said a significant break above that point could mean more gains lie ahead.
«At this point we’re bumping up against some serious technical lines … So you’re either going to break out strong or you’re going to fail again,» said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
U.S. retail sales data, due Tuesday, could be in the back of investors’ minds. «If you get a good retail sales number, the party’s back on. But I think you’ve still got a lot of lack of confidence, a lot of people who are not trusting in this market at this point,» Saluzzi added.
Indexes are on track for a fourth straight winning session, including an eighth day of gains out of the last nine for the S&P 500 and Dow. With Monday’s rise, all three indexes were in positive territory for the year.
Banks led Wall Street, with JPMorgan Chase & Co (JPM.N) rising 3.8 percent to $41.27, while Bank of America Corp (BAC.N) rose 2.7 percent to $13.92. The Select Sector Financial SPDR (XLF.P) added nearly 2 percent to $14.80.
Global regulators agreed to force banks to more than triple their top-quality capital reserves in hopes of preventing another credit crisis. But the new rules, known as «Basel III,» provide transition periods that could extend to January 2019 or later — more time than many bankers expected.
The Dow Jones industrial average (.DJI) was up 40.60 points, or 0.39 percent, at 10,503.37. The Standard & Poor’s 500 Index (.SPX) added 8.31 points, or 0.75 percent, at 1,117.86, still above the 200-day moving average of around 1,115. The Nasdaq Composite Index (.IXIC) jumped 31.18 points, or 1.39 percent, at 2,273.66.
Another acquisition in the technology sector added to the positive tone.
Hewlett-Packard Co (HPQ.N) will buy cybersecurity company ArcSight Inc (ARST.O) for $1.5 billion, the latest in a series of technology-sector transactions. ArcSight surged 25 percent to $43.86, while HP edged down 0.4 at $38.06.
Chinese factories ramped up production in August, data showed, while a key measure of money growth easily topped expectations. The data built on recently improved sentiment in U.S. markets as worries eased over whether the economy was headed back into recession.
Advancers topped decliners by about 11-to-3 on the New York Stock Exchange.
(Reporting by Caroline Valetkevitch; additional reporting by Leah Schnurr; editing by Jeffrey Benkoe)