US stocks closed higher on Monday following an upbeat read on pending home sales and after a key index of U.S. manufacturing activity reached its highest level in three and a-half years in October. However stocks pulled back from earlier highs as investors sold some bank shares after the Fed warned about banks' potential losses on commercial real estate loans.
On Monday the Dow Jones gained 77 points to 9,789. The S&P500 Index rose 7 points to 1,043 and the NASDAQ closed 4 points higher to 2,049.
In economic news: A survey conducted by the Institute for Supply Management showed that manufacturing activity, nationally, rose to a read of 55.7 in October from 53 the month before. A read above 50 indicates growth in the sector.
The Commerce Department reports that construction spending rose 0.8 per cent.
While the National Association of Realtors reports that the pending home sales rose 6.1% in September, way more than the 1.2% increase analysts were expecting.
In company news: Shares in small business lender CIT Group Inc (NYSE:CIT) plunged 65.28 per cent to $0.25. The company filed for bankruptcy protection over the weekend, the move is part of CIT Group’s reorganization plan which has the support of majority of bondholders. CIT hopes to reduce its debt by $10 billion.
Shares in automaker Ford Motor Company (NYSE:F) rose 8.29 per cent to $7.58. The maker of cars and trucks posted its first profit in over a year on Monday, reporting quarterly profit of almost $1 billion or 29 cents a share, boosted by the governments ‘Cash for Clunkers’ initiative. Expectations were for a loss of 12 cents a share.
Shares in cosmetics maker Revlon Inc (NYSE:REV) soared 19.45 per cent to $10.07. According to Reuters the company says that one of its units - Revlon Consumer Products Corp - is looking to amend its bank term-loan and bank revolver credit agreements, which will allow it to refinance its 9.5 per cent senior notes due in April 2011.
And shares in commercial lender CapitalSource Inc (NYSE:CSE) lost 12.08 per cent to $3.13. The company posted a loss for the third quarter of $274 million compared to a loss of $247 million in the previous quarter. The result impacted by an accounting charge and increase in bad loan provisions.
In the NASDAQ Top 100: Vertex Pharmaceuticals was the best performer, shares gaining 7.72% to $36.15. Followed by Express Scripts and Expeditors. The biggest drag on the NASDAQ was Research in Motion, shares falling 5.09% to $55.74. Activision Blizzard and Amgen also finished lower.
