Banks boost Wall St

Bank and technology shares lifted Wall Street today on hopes a revival in business demand will boost corporate profits.

Banks' shares rallied to their highest in more than two years, adding to recent momentum, amid bets an improving economy will stoke loan demand.

"The natural conclusion investors are making is, if the economy is turning, financials are poised to do well," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus in Baltimore.

The Nasdaq rallied for a fifth straight day, helped by data showing US wholesale inventories fell unexpectedly in January and sales hit their highest in more than a year.

"There's demand out there and (businesses) are going to have to build up those inventories," Mata said.

Chip maker Intel Corp shares gained 1.2 per cent to US$21.19 and the PHLX semiconductor index rose 2.2 per cent.

Industrial shares ranked among the top gainers, with Boeing Co up 3.3 per cent at US$70.01.

The Dow Jones industrial average edged up 2.95 points, or 0.03 per cent, to end at 10,567.33. The Standard & Poor's 500 Index rose 5.16 points, or 0.45 per cent, to 1,145.61. The Nasdaq Composite Index gained 18.27 points, or 0.78 per cent, to 2,358.95.

The benchmark S&P 500 Index extended its year-long advance and is now up 69.3 per cent from its 12-year closing low hit a year ago on March 9.

The more upbeat view of the economy helped lift bank stocks, with Citigroup Inc up 3.7 per cent at US$3.96, and Wells Fargo & Co up 2 per cent at US$29.57. The KBW bank index rose 2.2 per cent to its highest close since mid-November 2008.

In deal news, Abbott Laboratories agreed to buy Facet Biotech Corp for US$27 a share late Tuesday, topping a failed bid from Biogen Idec Inc.

Abbott's stock rose 0.4 per cent to US$55.03 on the New York Stock Exchange, while Facet soared 66.6 per cent to US$27.01 on the Nasdaq.

Shares of Travelers Co dropped 1.3 per cent to US$52.89, capping the Dow industrials' advance.

About 9.50 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, slightly below last year's estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 2 to 1, while on the Nasdaq, more than eight stocks rose for every five that fell.

- Reuters