Bank shares helped Wall Street rebound on Monday from a sharp weekly drop, after a rescue deal for Portugal's largest listed lender and supported also by earnings from companies like Berkshire Hathaway.
The Dow Jones industrial average rose 9.93 points or 0.06 percent, to 16,503.3, the Standard & Poor's 500-stock index gained 3.94 points or 0.2 percent, to 1,929.09 and the Nasdaq Composite added 18.58 points or 0.43 percent, to 4,371.22.
Portugal will spend 4.9 billion euros ($6.58 billion) to rescue Banco Espírito Santo, its largest listed lender, testing the eurozone's resilience to another banking crisis just months after Lisbon exited an international bailout.
A scant United States economic calendar kept the focus on earnings. Berkshire shares are up 1 percent after its results posted Friday.
Michael Kors Holdings is dropping 4.4 percent after the company's results, even as the company reported a 43 percent rise in quarterly revenue.
The conglomerate Loews Corporation posted a 57 percent drop in quarterly profit on lower earnings from Diamond Offshore Drilling, one of the world's top five offshore rig contractors. Diamond was also downgraded and its price target was cut by Deutsche Bank, alongside similar bearish calls on Ocean Rig, Seadrill, Rowan Companies and others in the sector.
European stocks rose Monday and bond yields fell on a banking sector rebound after Portugal prevented the collapse of Banco Espírito Santo, and shares in the continent's largest bank, HSBC, jumped in the wake of its latest earnings report.
This dovetailed with easing fears of higher United States interest rates after Friday's employment report, and eclipsed growing geopolitical concerns over the Middle East and the effect of Western trade sanctions on Russia.
"The market's initial reaction is that it's pretty reassuring to see Portugal moving quickly to rescue B.E.S. Over all, it eases systemic fears that had resurfaced last week," a Saxo Bank sales trader, Andrea Tueni, said.
On Monday, HSBC reported a larger-than-expected drop in profits, but investors looked instead to the bank's attractive dividend yield and scooped up the shares, lifting them to a three-month high.
"There are a number of positives within the statement, not least of which is the ongoing strength of the balance sheet," said Richard Hunter, head of equities at Hargreaves Lansdown. "And a dividend yield which, at 4.9 percent, is extremely attractive."
HSBC shares were up 1.7 percent at 640 pence, having initially fallen by the same magnitude.
At 12:45 p.m. British Summer Time on Monday the FTSEurofirst 300 index of leading shares was up a third of a percent, led by a 1.3 percent rise in pan-European banking stocks. Eurozone financials were up 1.6 percent.
Germany's DAX rose 0.2 percent, France's CAC 40 was up 0.7 percent and Britain's FTSE 100 index was up 0.5 percent.
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