Financials Drove Market Higher

U.S. stocks closed near their highs of the day Monday, led by financial companies, as investors shrugged off Hurricane Irene and welcomed a better-than-expected showing for consumer spending.The Dow average gained 254.71 points, or 2.26%, to 11,539.25. The S&P 500 added 33.28 points, or 2.83%, to 1,210.08. The Nasdaq Composite ended up 82.26 points, or 3.32%, to 2,562.11.

Financial stocks led a market rally Monday as insurance companies benefited from limited damage from Hurricane Irene and Bank of America Corp. said it plans to sell 13.1 billion shares of China Construction Bank.

A consulting firm predicted that the damages paid by insurers would be about $2 billion to $3 billion, less than the $6 billion the industry paid out after Hurricane Isabel struck the region in 2003.

Interest rates on short-term Treasury bills were unchanged in Monday’s auction with rates on six-month bills remaining at a record low. The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.015 percent, the same as last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.045 percent, also unchanged from last week.

Gold futures closed lower Monday in thin volume as stronger U.S. equities took away some of the metal’s allure. Gold for December delivery declined $5.70, or 0.3%, to finish at $1,791.60 an ounce on the Comex division of the New York Mercantile Exchange.

Crude futures rallied 2.2% Monday, after data showed Americans earning and spending more and as U.S. equities traded higher, stoking hopes of more demand for energy.  Crude for October delivery added $1.90, or 2.2%, to settle at $87.27 a barrel on the New York Mercantile Exchange after trading as high as $87.62 a barrel earlier.


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