Financial-services stocks led advance

Despite Monday's sharp advance in major stock market indexes, the market struggled to keep its head above water.

Advancing stocks outnumbered losers by just a 6-5 ratio among New York Stock Exchange stocks. There were more losers than winners on the Nasdaq stock market, by an 8-7 ratio.

Monday's rally was led by financial-services stocks, which have been the biggest drag on the market for weeks.

Broker UBS issued a "buy" rating on Merrill Lynch, helping to lift bank and brokerage stocks generally. Merrill Lynch shares rose $4.50, or 6.4 percent, to $74.55.

The Dow Jones industrial average gained 286.87, or 2.2 percent, to 13,468.78. All but one of the 30 Dow stocks, Alcoa, closed higher, led by financial-services giants American International Group, American Express and Citigroup.

The broader Standard & Poor's 500 index rose 34.61, or 2.4 percent, to 1467.67. The Nasdaq composite index added 36.08, or 1.4 percent, to 2547.33. The Russell 2000 index of small-company stocks gained 10.97, or 1.4 percent, to 766.39.

NYSE trading volume reached 2.28 billion shares, up from 2.04 billion shares Friday. Nasdaq volume totaled 2.73 billion shares, up from 2.72 billion shares Friday.

Oil prices sank in New York futures trading, reflecting worries about a glut of oil in world markets and the prospect of slower global economic growth. Crude oil for September delivery fell $3.42 a barrel, to $72.06.

Treasury securities declined ahead of Tuesday's meeting of Federal Reserve interest-rate policymakers and the scheduled sale of $22 billion in 10-year and 30-year Treasury bonds later this week.

The dollar was little changed, reflecting optimism about Monday's stock market rally and uncertainty about Tuesday's Fed meeting.

TREASURY AUCTIONS: Interest rates fell at Monday's auctions of 3- and 6-month Treasury bills. The discount rate for 3-month bills was 4.77 percent, down from 4.82 percent last week. The rate on 6-month bills was 4.73 percent, down from 4.80 percent last week.

The coupon-equivalent investment rates at Monday's auction were 4.91 percent for 3-month bills and 4.93 percent for 6-month bills.

source:www.chicagotribune.com