Stock Market Today: Dow Above 17,000 as Citigroup Reaches $7B MBS Settlement

NEW YORK (TheStreet) -- The Dow Jones Industrial Average was back above the psychological threshold of 17,000 on Monday as European contagion fears subsided and Wall Street grew more optimistic that second-quarter earnings growth momentum will overcome shifting monetary policy.

Citigroup (C) beat second-quarter earnings estimates, helping to push shares up 3.6% to $48.68 on Monday. The bank reported adjusted earnings of $1.24 a share vs. the consensus estimate of $1.05. Citigroup also announced a $7 billion settlement with U.S. authorities over the investigation of its sales of mortgage-backed bonds.

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The Dow was advancing 0.77% to 17,074.4. The S&P 500 was higher by 0.55% to 1,978.48. The Nasdaq was rising 0.7% to 4,446.5. Markets took a turn upward in the afternoon session Friday, though closed with only minor gains.

Markets in Europe and Asia were also back in positive territory on Monday.

"Reassured that systemic risks from Portugal are very limited, even in a worst case scenario, the dust settled somewhat Friday after Thursday's market tremors," wrote Michala Marcussen, global head of economics at Societe Generale.

As the economy continues to improve and labor market trends point higher, Gina Martin Adams, Wells Fargo Securities' institutional equity strategist, is expecting the S&P 500 to post 6.5% year-over-year EPS growth for the second quarter, up from the 3.3% reported in the first quarter and 3.9% a year ago. Adams said signs that index EPS growth may finally begin accelerating with the second-quarter season after two years of below-trend earnings growth include an improvement in revision momentum, an increasingly positive shift in company guidance, and earnings growth broadening to non-financial industries.

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