Stocks bounced back late Monday after a dismal day Friday and a shaky start in the morning. The Dow Jones Industrial Average rose 44.95 points (+0.33%), Standard & Poor's 500 index climbed 5.70 points (+0.38%), and the Nasdaq finished up 28.77 points (+1.06%). Volume on the NYSE was solid at 1.39 billion shares, and advancers beat decliners by a ratio of about 6:5.
The day started negative as indexes were pressured down by poor performances from foreign markets. However, Merck (+2.9%) provided an upbeat report, beating forecasts on 62% earnings growth (full story). Halliburton (+1.2%) reported a 19% increase in earnings, matching estimates (full story). Kimberly-Clark (+4.5%) said earnings grew 24%, beating forecasts by a penny (full story). Schering-Plough (-13.4%) could not keep the party going however, after its earnings came up short (full story).
Strong performances from the financial (+1.0%), consumer discretionary (+1.0%), industrial (+0.5%) and technology (+1.0%) sectors were a big reason for the market's positive day. Energy (-1.3%) could not keep up, as crude dropped $1.04 to $87.56/barrel. Financials were helped by Bear Stearns (+1.2%), after the bank announced a cross-investment deal with China's Citic Securities (full story). Goldman Sachs (+2.1%) and KKR agreed to invest $400 in Harman International in lieu of their cancelled LBO (-0.6%) (full story). No economic news was released Monday, and though Treasurys did experience a volatile session, the U.S. 10-year note finished nearly unchanged yielding 4.40%.
Apple reported after the bell Monday, easily beating estimates, and was up 7.6% in post-market action, after finishing the day up 2.3% (full story). American Express, which reported late Monday as well, also beat and was up 1.7% in after-hours trading (full story).
The State Street Investor Confidence Index (10:00 AM) will be released Tuesday, but its market impact should be minimal. The market should be influenced by solid earnings from AXP and AAPL, as well as Tuesday earnings from AT&T, Amazon, Biogen, DuPont, Lockheed Martin, UPS, and Whirlpool among others.
Commentary: Earnings Season So Far: 65% Beat Rate • Mr. Dow: Where to Now?
Stocks to watch: AAPL, AXP, SGP, HAL, KMB, GS, HAR, BSC, MRK