BofA leads banks up; S&P 500 index ekes out gain
By The Associated Press
Published: Monday, May 6, 2013, 4:42 p.m.
NEW YORK — Bank of America led a rally in big-bank stocks in mostly quiet trading on Monday. Stock indexes ended little changed after a record-setting run last week.
News that Bank of America and MBIA, a bond-insurance company, had reached a settlement over a long-running dispute propelled both companies' stocks up. BofA will pay $1.7 billion to MBIA and extend the troubled company a credit line.
MBIA soared 45 percent, or $4.46, to $14.29. Bank of America gained 5 percent, or 64 cents, to $12.88, making it the leading company in the Dow Jones industrial average.
The Dow slipped 5.07 points to close at 14,968.89. The Standard & Poor's 500 index crept up 3.08 points to 1,617.50, a gain of 0.2 percent.
Six of the 10 industry groups in the S&P 500 rose, with financial companies in the lead.
A handful of companies reported quarterly results. Tyson Foods, the nation's largest meat-processing company, fell 3 percent, the biggest drop in the Standard & Poor's 500 index. The company reported its net income sank as costs for chicken feed rose. Tyson's stock lost 83 cents to $24.10.
Companies have reported solid quarterly profits so far this earnings season. Seven of every 10 big companies in the S&P 500 have beat the earnings estimates of financial analysts, according to S&P Capital IQ. But six of 10 have missed revenue forecasts.
“Yet again, corporations continue to do more with less,” said Dan Veru, the chief investment officer of Palisade Capital Management.
Veru said the trend is likely to lead to more mergers in the coming months, as cash-rich companies look for ways to raise revenue. A wave of mergers could shift the stock market's rally into a higher gear, he said.
The Nasdaq composite rose 14.34 points to 3,392.97, up 0.4 percent. The price of crude oil edged up 55 cents to $96.16, and gold rose $3.80 to $1,468.10 an ounce.
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