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NEW YORK - US stocks extended gains Monday as sentiment was boosted by data showing a surge in new home sales and robust corporate earnings.
The Dow Jones Industrial Average jumped 100.81 points (0.97 percent) to a two-month high of 10,525.43, after surging 3.2 percent last week. The blue-chip index posted its first daily close above 10,500 since May 18.
The tech-rich Nasdaq composite index gained 26.96 points (1.19 percent) to 2,296.43 while the broader S&P 500 index added 12.35 points (1.12 percent) at 1,115.01.
The S&P 500 had finished 3.5 percent higher last week, breaching the 1,100 level for the first time since June 21.
"US stocks are extending the solid gains from last week as upbeat economic news is supporting economic recovery sentiment, with today's dose of data coming in the form of a sharp jump in new home sales," analysts at Charles Schwab & Co said in a client note.
Shares "spiked suddenly with the data's release," analysts at Briefing.com said, citing the strong rebound of new home sales in June after plunging to a record low the previous month.
The Commerce Department said sales increased 23.6 percent to 330,000 units from a revised May rate of 267,000, a record low.
But economists cautioned the market against reading too much into the large sales increase.
"Builders sold almost no new homes in May so the sharp rise in June shouldn't be taken as a sign the housing market is suddenly on fire," said analyst Joel Naroff with Naroff Economic Advisors.
"But the bulls were clearly in no mood to be picky," noted analyst Elizabeth Harrow of Schaeffer's Investment Research.
Market optimism also came Monday from the US corporate earnings front.
As many companies lived up to expectations of higher-than-expected profits, FedEx, a top US package-shipping company and economic bellwether, boosted its first quarter and full-year earnings forecast.
Of the 175 S&P 500 companies that have reported their quarterly earnings, 78 percent came in better than expected, led by those in the technology, financials, and industrial sectors.
FedEx jumped 5.61 percent to 83.39 dollars, boosted by its upbeat earnings guidance.
BP shares on the New York Stock Exchange rose 4.86 percent to 38.65 dollars on reports that chief executive Tony Hayward is expected to quit imminently with a massive payoff after being lambasted over the Gulf of Mexico oil spill.
IBM rose 0.02 percent to 128.41 dollars even as European competition enforcers announced they were probing the computer giant on two separate cases relating to antitrust infringements.
Bonds were mostly flat. The yield on the 10-year US Treasury bond was unchanged at Friday's rate of 2.994 percent while that on the 30-year bond declined to 4.018 percent from 4.019 percent. Bond yields and prices move in opposite direction.
- AFP /ls
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