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 Equities opened higher as strong results from Citigroup and bullish
retail sales data lifted sentiment, though shares lost ground in the
last hour of trading. Both the Nasdaq and the S&P 500 briefly turned
negative, though they subsequently returned to positive territory.
Geopolitical concerns returned to the forefront after pro-Russian
separatists ignored an ultimatum to leave occupied government
buildings in eastern Ukraine as a threatened military offensive by
government forces failed to materialize. Rebels in the town of
Slaviansk issued a bold call for Russian President Vladimir Putin to
help them.
Citigroup <C.N> led financial shares higher after the bank reported
quarterly earnings that beat expectations, aided by a smaller loss
on its troubled assets even as its revenue declined. The stock rose
4.4 percent to $47.67 while the S&P financial index <.SPSY> climbed
0.8 percent and the KBW Banks index <.BKX> gained 0.7 percent.
Among other financials, Bank of America Corp <BAC.N> shares rose 1.5
percent to $16, while Morgan Stanley <MS.N> shot up 2.1 percent to
$29.06.
"We're in a tug of war between the fundamentals of earnings — and so
far, some have looked good — and then a broad cloud of geopolitical
uncertainty underlying everything, which hasn't been getting the
attention it deserves in markets," said Nicholas Colas, chief market
strategist at the ConvergEx Group in New York.
Biotech shares remained volatile, ending flat after a session when
the Nasdaq biotech index <.NBI> rose as much as 2.7 percent and fell
as much as 1.9 percent. The biotech sector entered bear market
territory — defined as a 20 percent drop from its peak — on Friday
as investors took profits in the high-flying group and pushed the
Nasdaq below 4,000 for the first time in two months.
Intuitive Surgical <ISRG.O> was the S&P 500's biggest decliner,
falling 3.3 percent to close at $425.
The Dow Jones industrial average <.DJI> shot up 146.49 points, or
0.91 percent, to end at 16,173.24. The Standard & Poor's 500 Index
<.SPX> gained 14.92 points, or 0.82 percent, to finish at 1,830.61.
The Nasdaq Composite Index <.IXIC> advanced 22.96 points, or 0.57
percent, to close at 4,022.69.
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Tension between Moscow and the United States increased over the
weekend as a Russian fighter aircraft made repeated low-altitude
close-range passes near a U.S. ship in the Black Sea.
An index of Russian stocks <.MCX> fell 1.3 percent and the ruble hit
its weakest in three weeks against the U.S. dollar as Ukraine's
preparedness to fight heightened fears of Russian military
intervention and more Western sanctions against Moscow.
Brent crude prices climbed 1.4 percent on concerns about supply
disruptions or sanctions against Russia. The S&P energy index <.SPNY>
rose 1.3 percent and was one of the best-performing sectors for the
day.
"It's troubling to see concerns expressed through price action in
oil, since high oil prices will serve as a tax on consumers," Colas
said.
U.S. retail sales recorded their largest increase in 1-1/2 years in
March, a bigger gain than had been anticipated and the latest sign
that the economy was emerging from its weather-induced slumber.
Medtronic <MDT.N> shares fell 1.9 percent to end at $58.08 after a
U.S. court ruling temporarily stopped sales of the company's aortic
heart valve replacement system in the United States because of a
patent infringement. Shares of Edwards Lifesciences <EW.N>, which
was on the other side of the ruling, surged 11 percent to end at
$81. The stock was the S&P 500's biggest gainer.
Shares of Aspen Insurance Holdings <AHL.N> jumped 11.2 percent to
$43.77 after Endurance Specialty <ENH.N> offered to buy Aspen for
$3.2 billion in cash and stock. Endurance shares slid 2.8 percent to
$52.32.
About 63 percent of stocks traded on the New York Stock Exchange
ended higher, while 51 percent of Nasdaq-listed shares ended in
positive territory.
About 5.96 billion shares traded on all U.S. platforms, according to
BATS exchange data, below the 6.96 billion traded on average so far
this month.
(Editing by Jan Paschal)
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