US stocks gain as oil retreats, banks rally

U.S. stocks advanced on Tuesday as oil prices eased to below $105 a barrel and financials rallied after Bank of America announced plans to increase dividends in the second half of the year.

The S&P 500 Index gained 12.76 points, or 0.97 percent, to trade at 1,322.77 at 12:42 p.m. EDT. The Dow Jones Industrial Average advanced 135.97 points, or 1.12 percent, to trade at 12,226.00. The Nasdaq Composite Index gained 1.01 percent.

[Get this delivered to your inbox for FREE. Subscribe to our daily Markets Newsletter.]

Crude prices declined 0.7 percent to$104.70 a barrel on reports that OPEC may boost production. Kuwait's oil minister said OPEC was in talks to boost production for the first time in more than two years.

Bank of America led the rally in financial sector after its chief executive Brian Moynihan said he believes the bank has the ability to earn between $35 billion and $40 billion a year in pretax earnings when the business normalizes. He also reiterated bank’s plans to increase dividends in the second half of the year.

Among the Dow components, Bank of America surged 4.35 percent and American Express gained 3.57 percent, while JP Morgan advanced 2.89 percent.

Sprint Nextel Corp (NYSE:S) shares surged 4.46 percent on news that Deutsche Telekom AG has been in talks to sell T-Mobile USA to Sprint in exchange for a stake in the combined entity.

Urban Outfitters Inc. (NASDAQ:URBN) shares plunged 15.40 percent as its fourth quarter earnings fell short of analysts’ expectations. Its quarterly net income declined to $75.2 million or $0.45 per share compared to $77.7 million or $0.45 per share in the same quarter last year, while analysts expected a net profit of $0.52 per share.

Expedia Inc. (NASDAQ:EXPE) shares gained 3.05 percent after the company stock was upgraded to “buy” rating from “hold” rating at Citi.

The euro declined 0.44 percent to 1.3907 against dollar, as concerns over the sovereign debt crisis re-emerged in the region, ahead of the European Union’s summit on Friday.

More from IBT Markets:
Subscribe to get this delivered to your inbox daily