(Reuters) - Stocks advanced on Monday, led by gains in financial companies as Citigroup reported stronger-than-expected profits and concerns about lenders' home foreclosure problems eased.
Citigroup Inc (C.N) shares jumped 4.1 percent to $4.11, helping other bank shares, while the S&P 500 financial index .GSPF gained 1.6 percent. The index was down 2.4 percent last week amid worries that bank profits could be hurt by a broad probe by authorities into foreclosure practices.
Citigroup reported its third consecutive quarterly profits. Last week, JPMorgan Chase and Co (JPM.N) posted results that also beat expectations.
Citigroup's results, boosted by slowing credit losses and reduced reserves for bad loans, helped to offset concern about the foreclosure crisis.
"The financials last week were getting hammered over questions over foreclosure proceedings ... now it doesn't seem to be as all-encompassing," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.
Corporate results suggest "the banks are slowly getting better, getting repaired. And I think that's been the game plan all along," he said.
The Dow Jones industrial average .DJI was up 56.80 points, or 0.51 percent, at 11,119.58. The Standard & Poor's 500 Index .SPX was up 4.05 points, or 0.34 percent, at 1,180.24. The Nasdaq Composite Index .IXICwas up 1.45 points, or 0.06 percent, at 2,470.22.
The financials sector has lagged market gains in the recent rally, with the S&P 500 up 12.4 percent since August 31 and the S&P financial index up 7.4 percent in that same period.
The Nasdaq led gains among the three major indexes last week, helped by stronger-than-expected results from Google Inc (GOOG.O) and other technology companies.
"There's a little bit of nervousness the good news is (already) in" the market for tech earnings, Pado said.
Still. Apple Inc (AAPL.O) gained 0.6 percent to $316.48, and International Business Machines Corp (IBM.N) rose 0.6 percent to $141.93 before their earnings reports later Monday.
Investors showed little reaction to data showing U.S. industrial production fell last month for the first time in more than a year and a report indicating home builder sentiment rose this month but remained at depressed levels.
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