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US STOCKS-Wall St jumps as banks lead S&P 500 to new high

Source : REUTERS
Last Updated: Tue, May 14, 2013 15:30 hrs

* S&P 500 and Dow climb to new highs, banks rally

* Tesla Motors extends gains on raised sales outlook

* U.S. shares of Nokia drop after unveiling new phone

* Indexes up: Dow 0.5 pct, S&P 0.8 pct, Nasdaq 0.8 pct

By Ryan Vlastelica

NEW YORK, May 14 (Reuters) - U.S. stocks rose and extended a recent rally on Tuesday, with the S&P 500 and Dow hitting a new intraday high as investors bet that the market's upward momentum would continue.

Gains were broad, with more than two-thirds of New York Stock Exchange-listed companies rising. Large-cap banks were among the day's biggest advancers, with Bank of America up 2.3 percent to $13.27 and Citigroup Inc up 2.1 percent to $49.97. Goldman Sachs advanced 2.9 percent to $153.97.

Wall Street has climbed for the past three weeks, and is up more than 14 percent so far this year, propelled by some earnings that beat lowered estimates and the Federal Reserve's easy monetary policy designed to stimulate the economy.

"We're riding a self-fulfilling prophecy of momentum. There's no fundamental reason for today's move, other than the continued easing by the Fed and momentum," said Paul Radeke, vice president at Minneapolis-based KDV Wealth Management.

While some analysts expect the momentum to wane in the near term, as equities haven't undergone a significant pullback this year, many say that the long-term trend remains positive as investors continue to use any market decline as a buying opportunity.

"The sheer volume of cash coming in from the sidelines is preventing any kind of correction, even though fundamentally we seem to be getting overbought," said Radeke, who helps oversee $400 million in assets.

The Dow Jones industrial average was up 73.83 points, or 0.49 percent, at 15,165.51. The Standard & Poor's 500 Index was up 12.92 points, or 0.79 percent, at 1,646.69. The Nasdaq Composite Index was up 26.17 points, or 0.76 percent, at 3,464.96.

The market had been trading sideways for three sessions, showing a gain of 0.07 percent as the winding down of the quarterly earnings season and a light economic calendar have left investors without a strong catalyst for further gains.

Economic data showed import prices slipped 0.5 percent last month due to a drop in oil costs, the biggest decline since December and matching Wall Street expectations.

U.S.-listed shares of Sony Corp jumped 9.2 percent to $20.63 after billionaire hedge fund investor Daniel Loeb called on the company to spin off its lucrative entertainment arm.

Nokia Corp unveiled a new version of its Lumia smartphone line, but U.S.-listed shares fell 5.7 percent to $3.62. Research company Gartner said Nokia lost 5 percentage points of market share in the first quarter, falling to 14.8 percent.

Tesla Motors extended its rise following a gain of 40 percent last week after lifting its sales outlook. It climbed 2.8 percent to $90.16 and hit an all-time high. Green Mountain Coffee Roasters, which like Tesla has been a favorite of short-sellers, rose 3.8 percent to $80.32, its highest since October 2011.

Most corporate earnings have been better than expected this quarter. With 90 percent of the S&P having reported, 67.2 percent have topped earnings expectations, according to Thomson Reuters data, which is even with the average over the past four quarters. However, only 46.9 percent have beaten revenue expectations, below the 52 percent average over the past four quarters.




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