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

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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 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.

Other individual companies to watch Monday include Shire , AbbVie ,Whiting Petroleum , Kodiak Oil & Gas , Mylan , eBay and Sotheby's .

Shire, the Dublin-based drugmaker, said Monday it would be willing to recommend to its shareholders a new $53 billion takeover bid from AbbVie. Shire was up 1.8% to $253.47 and AbbVie shares were down by 0.5% to $54.64.

Whiting Petroleum is buying Kodiak Oil & Gas for $3.8 billion in stock and the assumption of $2.2 billion in debt, in a deal that will make it the largest producer in the booming Bakken region of North Dakota and Montana. Whiting shares were advancing 7.7% to $84.50 and Kodiak Oil & Gas was tacking on 5.6% to $15.03.

Sotheby's was rising 1.1% to $40.12 after it and eBay said they're partnering to make available art and collectibles from Sotheby's live auctions in New York to eBay's 145 million active buyers.

Mylan was popping 2.7% to $51.53 after the company said it will buy Abbott's non-U.S. developed markets specialty and branded generics business for $5.3 billion in stock.