Good news from Buffett's company sparks late Wall Street rally
NEW YORK — The stock market staged a late-day rally on Monday, helping push the Dow Jones industrial average higher for the first time in a week.
Investors had a couple pieces of positive news to get behind: a decent earnings report from Berkshire Hathaway and the announcement of a rescue package for a struggling Portuguese bank.
However, investors remain cautious after last week's sell-off, which gave the Standard & Poor's 500 index its worst five-day period in more than two years.
The Dow rose 75.91 points, or 0.5 percent, to 16,569.28. It's the first time the blue chip index has posted a gain since July 28.
The Standard & Poor's 500 index rose 13.84 points, or 0.7 percent, to 1,938.99 and the Nasdaq composite added 31.25 points, or 0.7 percent, to 4,383.89.
Berkshire Hathaway, the company run by Warren Buffett, helped give the market an early boost.
The Omaha-based company reported late Friday a profit of $6.4 billion last quarter, helped by its insurance division Geico, which performed well above Wall Street's expectations. Berkshire's investment portfolio was also a big driver of profits. The company's Class B stock rose $3.89, or 3 percent, to $129.70, one of the biggest gain in the S&P 500.
The news out of Portugal helped the market.
Portugal's central bank said late Sunday it would shore up Banco Espirito Santo, one of the country's biggest financial institutions. Portugal's PSI 20 index rose 1 percent on the news.
Last week's market rout, where the S&P 500 fell nearly 3 percent in five days, remains front and center in investors' minds.
“There does appear to be a little caution in the markets,” Alpari analyst Craig Erlam said. “Investors are a little concerned that the sell-off, which started last week, is not over and could lead to something much bigger.”