* Citigroup rallies on higher-than-expected adjusted profit
* Retail sales top forecast, NY state manufacturing
* Drugmakers rise, led by Eli Lilly, Abbott Labs
* Dow up 0.6 pct, S&P up 0.6 pct, Nasdaq up 0.3 pct
By Chuck Mikolajczak
NEW YORK, Oct 15 U.S. stocks advanced on Monday
as optimism about stronger-than-expected Citigroup earnings and
retail sales, along with a rebound in energy shares, put
investors in the mood to buy.
Citigroup Inc rose 4.5 percent to $36.32 and gave the
biggest lift to the S&P 500 a fter the third-largest U.S. bank
reported quarterly adjusted earnings that surged from the
year-ago quarter and beat expectations. The growth came as
mortgage lending increased and capital markets results
Investors remained cautious about Europe, waiting for signs
that Spain was ready to formally request a bailout, which is
seen as necessary to deal with its debt crisis.
Both the Dow and the S&P 500 appeared to successfully defend
their technical support levels at the 50-day moving average,
which last week's declines had left each index on the precipice
of breaking below.
After challenging five-year highs in mid-September, the
benchmark S&P 500 retreated last week. The S&P 500 finished the
week down 2.2 percent, notching its worst weekly performance in
four months last week, on concerns about the strength of
" After big declines last week, we have a strong Citi
earnings (report) and positive European news. In the short term,
it takes European stress out and allows markets to focus on
earnings and the U.S. consumer," said Quincy Krosby, market
strategist at Prudential Financial in Newark, New Jersey.
Lending further support was a rebound in energy shares as
U.S. crude curbed an earlier slide that had pushed the price
down below $90 a barrel. The S&P energy index gained 0.3
September retail sales rose 1.1 percent, above the 0.8
percent growth that had been anticipated, but a survey showed
that an index of manufacturing activity in New York state shrank
for the third month in a row in October.
The Dow Jones industrial average gained 79.32 points,
or 0.60 percent, to 13,408.17. The Standard & Poor's 500 Index
gained 8.45 points, or 0.59 percent, to 1,437.04. The
Nasdaq Composite Index gained 10.07 points, or 0.33
percent, to 3,054.18.
Sprint-Nextel Corp fell 0.9 percent to $5.68 after
Japanese mobile operator Softbank Corp said it would
buy up to 70 percent of the company for $20.1 billion.
Sprint competitors AT&T Inc lost 1.3 percent to $35.17
and was the biggest drag on the Dow, while Verizon
Communications Inc was flat at $44.62. An S&P index of
telecom stocks slid 0.57 percent and ranked as the S&P
500's worst-performing S&P sector.
Profits of S&P 500 companies are seen dropping 2.4 percent
this quarter from a year ago, according to Thomson Reuters data.
With only 7 percent of S&P 500 companies having reported, 60
percent of companies have topped profit expectations - less than
the average beat rate of 67 percent for the past four quarters.
Drugmaker shares advanced, led by Eli Lilly and Co,
up 4.2 percent at $52.55, and Abbott Laboratories, up
3.8 percent at $71.93. The S&P healthcare index climbed
Eli Lilly shares rose after the drugmaker said a late-stage
study of its experimental gastric cancer drug met its main goal
of improving overall survival. Abbott's stock gained after
results from a mid-stage study of hepatitis C medicines.