Reuters Wall Street gains as Lowe's lifts mood

NEW YORK (Reuters) - Stocks rallied on Monday as better-than-expected results from the No. 2 U.S. home improvement retailer, Lowe's Cos Inc, helped spark broad-based buying on hopes the recession is easing and consumer spending is stabilizing.

Investors' optimism extended to sectors closely aligned with economic growth, including homebuilders, banks, energy companies and retailers. Positive broker comments on Bank of America Corp, up nearly 10 percent at $11.73, boosted financial shares, while rising oil prices improved the outlook for energy names.

Shares of Lowe's rose 8.1 percent to $19.94 after the company raised its full-year forecast due to signs that the housing market's decline may be ebbing. Lowe's Chief Executive Robert Niblock said consumer confidence has improved in recent weeks, and housing turnover is showing "signs of a bottom."

That optimism helped lift shares of Lowe's top rival Home Depot Inc, which added 6.6 percent to $26.02 a day before the Dow component is set to deliver its own quarterly scorecard.

"Lowe's numbers come at a time when the market is looking to rebound," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut. "It does show that consumer spending in general has been a bit stronger than many had anticipated."

The Dow Jones industrial average gained 235.44 points, or 2.85 percent, to 8,504.08. The Standard & Poor's 500 Index rose 26.83 points, or 3.04 percent, to 909.71. The Nasdaq Composite Index advanced 52.22 points, or 3.11 percent, to 1,732.36.

The S&P 500 recently climbed from a 12-year closing low on March 9, rising 37.4 percent through the close on May 8. But after the benchmark index gave up some ground last week amid concerns about the economy and a flurry of secondary stock offerings, the S&P 500 was up 34.5 percent from that low at Monday's close.

The S&P also moved back above 900, which some investors see as a key psychological level. The S&P closed above 900 in early May for the first time since the start of the year, but fell back into the 800s last week. more...