Stocks rally at close after midday dip

Trader Benedict Willis, left, calls out as he Trader Benedict Willis, left, calls out as he works on the floor of the New York Stock Exchange Friday, Aug. 1, 2014. Photo Credit: AP / Richard Drew

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Stocks rallied late in the day Monday, helping push the Dow Jones industrial average higher for the first time in a week.

At the close on Wall Street, The Dow had gained 75.9 points, or nearly 0.5 percent, to 16,569.3. It's the first time the blue chip index has posted a gain since July 28. The Standard & Poor's 500 index had added 13.8 points, or 0.7 percent, to 1,939, and the Nasdaq composite added 31.3 points, or 0.7 percent, to 4,384.

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.

"Everyone is double-checking their own portfolio after what happened last week," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

Berkshire Hathaway, the company run by Warren Buffett, helped give the market an early boost Monday. The Omaha, Nebraska-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 gains in the S&P 500.

Michael Kors was the biggest decliner in the S&P 500, falling $4.82, or 6 percent, to $77.01. While the handbag and women's fashion company reported a rise in second quarter earnings, the company's profit margin shrank for the second consecutive quarter.

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The news out of Portugal also 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.

Portugal's banking woes were one of many catalysts for last week's market sell-off. While Portugal's economy is small, strategists say that the eurozone's economy is fragile enough that Portugal's woes could spread. Europe just exited its latest recession a year ago, while the U.S. emerged from its last recession in 2009.

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