US stocks move higher in late trading

Associated Press
Trader Steven Kaplan, center, works on the floor of the New York Stock Exchange, Monday, Aug. 4, 2014. U.S. stocks are opening mostly higher as the market recovers from a two-day slide last week. (AP Photo/Richard Drew)
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NEW YORK (AP) — After spending most of the day searching for direction, stocks were solidly higher in late-afternoon trading Monday. Investors had two pieces of positive news: a decent earnings report from Berkshire Hathaway and the announcement of a bailout package for a struggling Portuguese bank. However, investors remain cautious after last week's sell-off.

KEEPING SCORE: The Dow Jones industrial average rose 88 points, or 0.5 percent, to 16,582 as of 3:19 p.m. Eastern. The Standard & Poor's 500 index rose 15 points, or 0.8 percent, to 1,940 and the Nasdaq composite rose 38 points, or 0.9 percent, to 4,391.

PORTUGUESE BANK RESCUE: Portugal's central bank said late Sunday it will rescue the ailing Banco Espirito Santo, one of the country's biggest financial institutions. The bank's woes were a major reason European markets fell last week. Portugal's PSI 20 index rose 1 percent on the news.

BUFFETT'S BIG PAYDAY: Warren Buffett's Berkshire Hathaway reported a profit of $6.4 billion last quarter, helped by its insurance division Geico, which performed well above Wall Street's expectations. Berkshire's investment portfolio was also a big driver of profits last quarter. The company's Class B stock rose $4.11, or 3.2 percent, to $129.94.

THE AFTERMATH: Investors are still recovering from last week's market rout, where the S&P 500 fell nearly 3 percent in five days. It was the worst week for the index since June 2012.

"There does appear to be a little caution in the markets," said Alpari analyst Craig Erlam. "Investors are a little concerned that the sell-off which started last week is not over and could lead to something much bigger."

Last week, investors had several reasons to sell. There was escalating violence in Ukraine, Israel and Gaza, as well as concerns that the Federal Reserve was poised to start raising interest rates next year.

"Everyone is double-checking their own portfolio after what happened last week," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

LIGHTS OFF: Utility stocks were among the biggest decliners. Consolidated Edison, PG&E and Duke Energy fell 1 percent or more. The Dow Jones utility index, which includes 15 utility stocks, fell 1 percent.

OUT OF FASHION: Michael Kors dropped $5.38, or 7 percent, to $75.45. While the handbag and women's fashion company reported a rise in second quarter earnings, the company's profit margin shrank for the second consecutive quarter.

CURRENCIES, OIL: Currency markets were flat. The dollar was steady at 102.57 yen and the euro held at $1.3420. Benchmark U.S. crude for September delivery rose 41 cents to $98.29 per barrel. The yield on the 10-year Treasury note edged down to 2.49 percent from 2.50 percent on Friday.

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