Banks, Oils Lift Stocks

Updated from 4:24 p.m. EDT

The major indices in New York pared gains but still closed modestly higher on Thursday as financials and energy stocks offset a decline in the housing sector, with some help from better-than-expected demand in the Treasury's 30-year bond auction.

The Dow Jones Industrial Average finished up 31.90 points, or 0.4%, at 8770.92, while the S&P 500 was higher by 5.74 points, or 0.6%, at 944.89. The Nasdaq was better by 9.29 points, or 0.5%, at 1862.37.

Alcoa(AA Quote) and Pfizer(PFE Quote) were up 6.4% and 4.1%, respectively, on the Dow. But it was Bank of America(BAC Quote), rising 8.3%, that led the index after an upgrade.

Financials in general were higher, with the KBW Bank Index adding 2.6%. UBS(UBS Quote) rose 3.8%; Credit Suisse(CS Quote) added 2.2%; and Deutsche Bank(DB Quote) added 2.8%.

Stocks got a boost after the U.S. Treasury wrapped up the last leg of a $65 billion Treasury auction. The government sold $11 billion in 30-year notes with a bid to cover of 2.68 vs. the recent average of 2.21, and a high yield of 4.72%. The bid to cover ratio, a gauge of interest, is the number of bids received divided by those accepted.

Thursday's more favorable auction follows the Treasury's $19 billion auction of 10-year notes on Wednesday, which had a high yield of 3.99%, more than some traders had expected, prompting some worries about rising interest rates.

Longer-dated Treasuries were rising in price. The 10-year was up 22/32, yielding 3.86%, while the 30-year was higher by 1-1/32, to yield 4.69%.