Stocks rallied Monday morning as investors welcomed stronger-than-expected reports on housing and construction spending, adding to bets that the economy is closer to stabilizing.
The Dow Jones industrial average (INDU) gained 148 points, or 1.8%, around 45 minutes into the session. The S&P 500 (SPX) index added 16 points, or 1.9%. The Nasdaq composite (COMP) rose 25 points, or 1.5%.
The March pending home sales index from the National Association of Realtors jumped 3.2% from the prior month versus forecasts for a flat reading.
Construction spending, a government report, rose 0.3% in March versus forecasts for a decline.
Banks: Financial shares are likely to be choppy ahead of the release of the government's "stress tests" on Thursday. The government will release details on the 19 individual companies tested as well as the broad group of corporations.
The results are expected to include estimated loan losses in the event that the economy deteriorates further, along with an estimate of how much more capital banks would need to raise in such an environment.
Citigroup (C, Fortune 500) is reportedly among the banks that will need to generate more money to stay afloat. The bank may have to raise another $10 billion, according to the Wall Street Journal.
Autos: Italian carmaker Fiat, which recently completed an alliance with Chrysler, is eyeing a deal with the European unit of General Motors (GM, Fortune 500).
Companies: Shareholders descended upon Berkshire Hathaway's (BRK.A) annual meeting over the weekend. At the meeting, chief executive Warren Buffett said the firm expects to report a first-quarter operating profit.
Sprint Nextel (S, Fortune 500) reported surprise income excluding unusual items. Shares rose 14% in early trading.
Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.16% from 3.15% Friday. Treasury prices and yields move in opposite directions.
Other markets: In global trading, Asian markets ended higher and European markets rallied in afternoon trading.
In currency trading, the dollar fell versus the euro and gained against the yen.
U.S. light crude oil for June delivery rose 61 cents to $53.01 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $16.80 to $905 an ounce.
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