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US STOCKS-Wall Street climbs on Italy, U.S. housing data

Source : REUTERS
Last Updated: Mon, Apr 29, 2013 14:50 hrs

* Italy forms government after months of uncertainty

* Risk trade is on; gold rises as dollar falls

* Penney lines up $1.75 billion loan from Goldman

By Angela Moon

NEW YORK, April 29 (Reuters) - U.S. stocks climbed on Monday as Italy finally formed a government, relieving a two-month political stalemate and boosting investors' appetite for risky assets, while better-than-expected housing data boosted market optimism.

Starting off a week of heavy economic news, investors were keeping a close eye on Friday's all-important non farm payrolls numbers, as well as what the central banks in the U.S. and Europe will have to say about the state of the global economy later in the week.

The biggest gainers on Monday included J.C. Penney Co Inc after the department store chain said Goldman Sachs Group Inc will provide it with a five-year, $1.75 billion financing package to help it shore up its finances. The stock was up 2.5 percent at $17.42.

Wall Street was boosted by European shares, which edged up on Monday after Italy finally formed a government, although analysts saw the gains petering out in the near term.

The dollar traded slightly lower on an index basis as currency traders look to the European Central Bank meeting on Thursday to see what measures may be implemented to spur growth.

"Wall Street appears primed for another assault at record highs," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.

In macroeconomic news, data showed U.S. Commerce Department personal income rose 0.2 percent, slightly higher than expected, while contracts to purchase previously owned U.S. homes rose in March as the housing market continued to pick up pace this year.

This week's "highlights are likely to be Wednesday's meeting of the Federal Open Market Committee and Friday's non farm payroll report," said Wilkinson, adding that the employment report might show a post-sequester snapback in hiring.

Weak U.S. growth data has supported expectations the Federal Reserve will keep its pace of bond buying at $85 billion a month during the FOMC meeting announcement on Wednesday, while the European Central Bank (ECB) is widely expected to announce an interest rate cut when it meets on Thursday.

The Dow Jones industrial average was up 52.72 points, or 0.36 percent, at 14,765.27. The Standard & Poor's 500 Index was up 7.48 points, or 0.47 percent, at 1,589.72. The Nasdaq Composite Index was up 23.21 points, or 0.71 percent, at 3,302.47.

On Monday, hotel, energy and financial services conglomerate Loews Corp reported a 34 percent drop in first-quarter profit due to higher impairment charges and a sharp fall in investment income. The stock was off 0.7 percent at $44.14.

Shares of online retailer Amazon.com Inc were off 0.6 percent at $253.36 in early trading Monday. The stock was Friday's biggest drag on the S&P 500 and Nasdaq indexes in the wake of the company's results on Thursday.

Of the 274 companies in the S&P 500 that have reported earnings to date for the first quarter of 2013, 69 percent have reported earnings above analysts' expectations, and 43.2 percent have reported revenue above expectations.

U.S. stocks dipped in thin volume on Friday, though the market had a strong week overall.




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