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Surging Goldman Sachs Leads Wall Street Rally

This article is more than 10 years old.

Stocks bounced back from the doldrums Monday, in the first session of a busy week chock full of earnings reports from corporate America. Financial shares led the rally to put the major indexes up more than 2% after an analyst told investors to buy shares of investment bank Goldman Sachs ahead of the firm's earnings announcement.

Meredith Whitney said she expects Goldman to best analyst expectations tomorrow. That sent Goldman shares up $7.36, or 5.2%, to $149.23 and helped boost bank shares in general. The industry-tracking SPDR KBW Bank ETF gained $1.09, or 6.4%, to $18.10. (See "Buy Goldman, Sell The Economy.")

The Dow Jones industrial average rose 185 points, or 2.3%, to 8,332 on Monday. The S&P 500 gained 22 points, or 2.5%, to 901 while the Nasdaq was up 37 points, or 2.1%, to 1,793. The gains came despite continued economic gloom. On Monday the U.S. Treasury reported a June budget deficit of $94.3 billion, much of it due to the costs incurred from bailouts for U.S. auto companies and banks, compared with a $33.6 billion surplus in June 2008.

Drug distributor Cardinal Health was flat after the bell despite a credit downgrade by Moody's Investors Services. Last week Cardinal approved a spinoff of part of its business, leaving it reliant on low-margin distribution services. Moody's cited the spinoff when it downgraded the firm to one notch above "junk" status late Monday. Cardinal shares gained 1.4% earlier.

Shares of railroad operator CSX gained Monday ahead of the company's after-hours earnings report. Analysts expect the firm to announce it made 62 cents a share in the second quarter, down from 89 cents last year.

Trinity Industries soared Monday after an analyst upgraded the firm's shares. The Dallas-based firm makes railroad cars, barges and parts for highway construction. Longbow Research upgraded the firm to a "Buy" and said Trinity will likely beat earnings expectations. Shares jumped $1.52, or 12.7%, to $13.45.

Thomson Reuters and the Associated Press contributed to this report.