US consumer spending data boosts Wall Street shares

New York: Wall Street registered solid gains Monday on signs of firm US consumer spending and rising expectations that the Federal Reserve will raise interest rates as soon as late September.

The banking sector, which benefits from higher rates, enjoyed some of the best gains led by Wells Fargo, which added 2.2 percent.

The Dow Jones Industrial Average finished up 0.6 percent at 18,502.99.

The broad-based S&P 500 added 0.5 percent at 2,180.38, while the tech-rich Nasdaq Composite rose 0.3 percent to 5,232.33.

The markets opened higher and added to their gains during the session, helped by Commerce Department data showing consumer spending rose 0.3 percent in July while prices were flat.

Analysts said the data pointed to strong economic growth in the third quarter after a weak first half of the year.

"The market is taking its cue from better economic data and perhaps better earnings," said Art Hogan of Wunderlich Securities.

He said markets were "less fearful" over the prospect of higher interest rates later this year.

Indeed, bank shares rose on the expectation that their loan margins will widen as the Fed hikes rates. JPMorgan Chase added 1.0 percent and Goldman Sachs gained 0.6 percent. 

Embattled drugmaker Mylan rose 0.6 percent after it answered critics of its alleged profiteering on its anti-allergy EpiPen injector by saying it would release a generic version at half of the current $600 price tag.

Computer chipmaker Micron added 2.4 percent after broker Stifel increased its price target for the stock.

On the Dow, Dupont led gainers up 1.2 percent, while Nike was the top loser, off 0.6 percent.