Bank bets lift S&P and Nasdaq, but Boeing trips Dow

By Ellis Mnyandu

NEW YORK (Reuters) - The S&P 500 and Nasdaq rose on Monday as bets that major banks will post reassuring quarterly results fueled a run-up in financials, offsetting uneasiness about the fate of General Motors GM.N .

The Dow, however, slipped after Boeing (BA.N) said cuts in output of widebody planes and lower-than-expected airplane prices would hurt first-quarter profit, sparking caution about the economy's health and the corporate earnings season just getting under way.

Banking sector optimism followed surprisingly upbeat preliminary quarterly results from Wells Fargo (WFC.N) last week.

After the bell, Goldman Sachs (GS.N) , surprised investors by posting stronger-than-expected quarterly results a day early, and announced a $5 billion public offering of common equity.

Shares of JPMorgan, due to post results on Thursday, rose almost 3 percent to $33.70, while Bank of America (BAC.N) gained 15.4 percent to $11.02. Citigroup (C.N) , whose results are expected on Friday, soared 25 percent to $3.80. The KBW Bank index .BKX climbed 8 percent, while the S&P financial index .GSPF added 4.8 percent.

"The market is cheering, not so much that the banks are on the mend, but that they are not going to die," said Les Satlow, portfolio manager of Cabot Money Management in Salem, Massachusetts. "These are banks that are clawing their way back, literally from the brink of extinction. My view is that a key crisis phase of this economic downturn is behind us."

The Dow Jones industrial average .DJI fell 25.57 points, or 0.32 percent, to 8,057.81. The Standard & Poor's 500 Index .SPX gained 2.17 points, or 0.25 percent, to 858.73. The Nasdaq Composite Index .IXIC rose just 0.77 of a point, or 0.05 percent, to 1,653.31.

The banking sector's health has been a major worry after fallout from the financial crisis led the U.S. government to pump billions of dollars into troubled institutions such as Citigroup, which gave Wall Street a surprise last month when it said it was profitable in January and February.