Reassuring news about housing and banking Monday gave investors a reason to return to the stock market.
The Dow Jones industrial average shot up more than 180 points and wiped out more than half the losses it suffered last week. All the major indexes were up more than 2 percent.
A better-than-expected profit report from Lowe's Cos. and positive comments from analysts about the nation's banks revived investors' confidence in an economic rebound. Stocks fell sharply last week on worries that a recovery might be further off than hoped. The drop interrupted a rally that still has the Standard & Poor's 500 index up 30.5 percent since early March.
Stocks rose Monday after Lowe's posted earnings that easily beat Wall Street's forecasts and the company raised its full-year profit outlook. Buying accelerated later after the National Association of Home Builders said its housing market index rose for the second month in a row in May, reflecting growing optimism among builders.
Meanwhile, Rochdale Securities analyst Richard Bove noted the potential for "explosive earnings growth and unusually strong stock price performance" for banks as the economy recovers. And Goldman Sachs raised its rating on Bank of America Corp. to "Buy," due to expectations for solid earnings in the second quarter on strong mortgage and capital markets revenue.
BMO Nesbitt Burns also upgraded its view of the banking industry, saying it expects profits will start to rebound in coming quarters.
In mid-afternoon trading, the Dow rose 183.03, or 2.2 percent, to 8,451.67. The S&P 500 index rose 18.79, or 2.1 percent, to 901.67, and the Nasdaq composite index rose 34.41, or 2.1 percent, to 1,714.55.Report Typo/Error