NEW YORK - Stocks rose Monday as investors were encouraged by signs of progress in budget talks in Washington. Just two weeks remain before tax increases and spending cuts take effect if no deal is reached.
The Dow Jones industrial average rose 100.38 points to 13,235.39, its biggest gain this month. The Standard & Poor's 500 index climbed 16.78 points to 1,430.36, and the Nasdaq composite index rose 39.27 points to 3,010.60.
Marc Chaikin, chief executive officer of the Philadelphia-based market-research firm Chaikin Analytics, said investors became more hopeful for a resolution in the budget talks after House Speaker John A. Boehner made an offer to increase tax rates on high-income Americans.
"The fiscal cliff is obviously foremost on everyone's mind," Chaikin said.
Banks were among the best-performing stocks. Citigroup gained $1.55, 4.1 percent, to $39.15 after Raymond James raised its target price on the stock to $52 from $44. In a note to clients, the brokerage reaffirmed its "strong buy" rating, citing the "improving fundamental outlook."
Bank of America also gained 42 cents, or 4 percent, to $11.
Investors currently favor financial stocks over tech stocks, said Ben Schwarz, chief market strategist at Lightspeed Financial. "The banks are ripping today," he said. "People are looking for stability, and the tech sector hasn't given them any."
Financial companies make up the best-performing industry group in the S&P 500 this year, according to FactSet data. The group, which includes banks and insurers, has gained 25 percent this year.
Apple rose $9.04, or 1.8 percent, to $518.83 after the company said it sold more than two million iPhone 5s in China in their first three days of availability, a record for that market. The technology giant's stock has fallen 26 percent since it closed at a record $702.10 in September and is trading close to its lowest since February.
American International Group rose $1.01, or 3 percent, to $34.95 after the insurer said it was selling its remaining stake in the life insurer AIA Group. The Wall Street Journal said AIG might raise as much as $6.5 billion from the sale. AIG avoided collapse in 2008 with $182 billion from the government after suffering massive losses from investments in derivatives.
Tenet Healthcare gained 55 cents, or 1.8 percent, to $31.38 after Deutsche Bank raised its recommendation to buy from hold, citing Tenet's "compelling" business and financial outlook over the next one to two years.