Wall Street Up on Earnings, Portugal Bank Deal

New York: US stocks rose in early trade on Monday, lifted by earnings including those of Warren Buffett's Berkshire Hathaway, with gains partly offset by drops in high-yielding dividend stocks in the utilities sector.

The S&P 500 fell 2.7 per cent last week, its biggest percentage drop since the week through June 1, 2012. Despite the sharp decline, the benchmark's technical picture was still bullish, analysts said, giving support to the rebound.

The bailout of Portugal's largest listed lender, Banco Espirito Santo, supported bank shares. Lisbon agreed to rescue BES with a $6.6 billion bailout.

"From a technical viewpoint, the market managed on Friday to hold the lower end of the trading range and the fact we did that is helping the market out this morning," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"News from Portugal certainly is a step in the right direction and after the sharp losses of last week, the market needs to catch its breath."

Warren Buffett's Berkshire Hathaway Inc said late on Friday that its second-quarter profit soared 41 per cent to a record high due to substantial investment gains and improved results in manufacturing, service and retail businesses. The company's class B shares gained 1.4 per cent to $127.57.

The Dow Jones industrial average rose 5.59 points, or 0.03 per cent, to 16,498.96.

The S&P 500 gained 3.16 points, or 0.16 per cent, to 1,928.31.

The Nasdaq Composite added 14.48 points, or 0.33 per cent, to 4,367.12.

Utilities were the worst performing of the S&P's 10 industry sectors, down 1.4 per cent. At its session low on Monday, the index was down 8.8 per cent from its intraday record high set June 30.

Shares in Michael Kors tumbled 6.6 per cent to $76.49. Shares had jumped more than 10 per cent before the bell following results that showed a 43 per cent rise in quarterly revenue, but quickly reversed. The company said it expects margins to shrink for the year.

Pike Corp soared almost 50 per cent to $11.86. Investment firm Court Square Capital Partners and Pike's chief executive J Eric Pike, will take the company private in a deal valued at $12 per share.

Amgen said a late-stage study found that its blood cancer drug helped patients live significantly longer without the disease worsening, compared with standard treatment. Amgen shares gained 1.2 per cent to $127.09.

Hotel, energy and financial services Conglomerate Loews Corp posted a 57 per cent drop in quarterly profit on lower earnings from Diamond Offshore Drilling. Loews shares slipped 0.4 per cent to $42.09 while Diamond fell 0.4 per cent to $46.28.

Diamond was downgraded and its price target was cut by Deutsche Bank, alongside similar bearish calls on Ocean Rig, Seadrill, Rowan Cos and others in the sector. The S&P oil and gas drilling index fell 1.1 per cent.

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