Stocks Advance as Banks, Telecoms Climb

Stocks advanced Monday afternoon as investors were encouraged by the government's latest program to infuse banks with capital.

"There are so many different programs going on, I think there's a general feeling that the Fed and the government are getting on top of things," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

"The fact that this market didn't go down, despite the sharp drops overseas, is in some ways a vote of tentative confidence that the government is doing enough to really get the problems under control eventually," McCain said.

Trading was volatile, however, with stocks not being able to commit too long to one direction following waves of selloffs across Asia and Europe today. Concern is spreading that central banks may not be able to prevent a global recession.

Japanese stocks tumbled to 26-year lows and most other Asian markets fell heavily in chaotic trade, while European stocks hit a fresh 5 1/2-year low.

Still, for some, the lack of complete panic was disappointing.

“I wish we could see a little more signs of panic," Art Cashin, director of floor operations at UBS, told CNBC. "It’s the last Monday in October, it’s a perfect day for it if we could really get ‘em to throw ‘em out the window — this could be important today.”

Bank stocks advanced as at least 10 more banks joined the Treasury's $250 billion program to recapitalize the troubled sector and spur lending.

Fifth Third Bancorp shares rebounded, after sinking Friday, after the bank said Sunday that it has applied for a $3.4 billion cash injection from the government.

Shares of National City jumped after PNC Financial said late last week that it would buy the struggling Cleveland-based lender.

Among other notable moves in the banking sector, Regions Financial and First Horizon gained more than 10 percent.

Telecom stocks were among the day's biggest gainers after Verizon Communications narrowly beat estimates by posting a profit of 66 cents per share, a penny ahead of expectations. Its shares rose more than 11 percent.

Health-care provider Humana said its profit slipped 39 percent, but it, too, beat estimates by posting earnings of $1.49 a share, two cents better than estimates. Its shares fell.

Crude oil rebounded back above $64 a barrel after falling to a fresh 17-month low earlier.

In economic news, new home sales rose 2.7 percent in September, more than expected, after falling 12.6 percent to a 17-year low in August. Still, sales were down by a third from the same time last year. The median home price fell 9.1 percent to $218,400.

Investors will be bracing for reports later in the week on durable goods, GDP and personal spending, as well as a decision by the Federal Reserve on interest rates.

"Certainly there is going to be a rate cut on Wednesday. We expect around half a percentage point," Angus Campbell, head of sales at Capital Spreads, told CNBC.

This Week:

TUESDAY: Fed begins two-day meeting; Case-Shiller home-price index; consumer confidence; Earnings from U.S. Steel
WEDNESDAY: Weekly mortgage applications; durable goods; weekly crude inventories; Fed announcement on interest rates; Earnings from Aetna, Corning, Kellogg, Kraft, P&G, Qwest, Sony and Visa
THURSDAY: Weekly jobless claims; First look at Q3 GDP; weekly natural-gas inventories; Eanrings from AstraZeneca, Colgate Palmolive, CVS/Caremark, ExxonMobil, Motorola, Royal Dutch Shell and Electronic Arts
FRIDAY: Personal income and spending; consumer sentiment; Fed's Yellen speaks; Earnings from Chevron, Clorox and Nissan

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