By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rose Monday, extending
gains for the S&P 500 into a third session, as Wall Street
looked to Alcoa Inc. to begin the second-quarter earnings reporting
season.
Alcoa shares (AA) rose 0.3%. The aluminum producer and Dow
component is slated to release its quarterly results after the
market close.
"Alcoa has been notorious for reporting manufactured earnings
surprises" in the past, Nick Raich, CEO at the Earnings Scout,
wrote in an email. He noted that Alcoa is expected to earn 6 cents
in its second quarter, but one week ago the estimate was 9 cents, a
month ago 11 cents and three months ago 14 cents. "So, if Alcoa
reports 7 or 8 cents a share today, is that really a positive
surprise?" Raich said.
And, while Alcoa's earnings mark the start of earnings season,
results from major U.S. banks could call the tune in the coming
weeks. (Related blog post: What Alcoa's first-in-line status each
earnings season means.)
After climbing as much as 126 points, the Dow Jones Industrial
Average (DJI) was lately up 96.04 points, or 0.6%, at 15,231.88,
with Bank of America Corp. (BAC) leading a rise that included 26 of
its 30 members.
Chip maker Intel Corp. (INTC) led blue-chip decliners, with its
shares down 4% amid downgrades by a trio of analysts.
The S&P 500 index (SPX) rose 8.65 points, or 0.5%, to
1,640.54, with utilities and the finance sector pacing gains among
its 10 major sectors.
"We continue to be stuck in the 1,600 to 1,650 range for the
S&P 500. It's a time to manage risk on individual stocks,
especially as we approach earnings season," noted Elliot Spar,
market strategist at Stifel, Nicolaus & Co.
The Chicago Board Options Exchange Volatility Index (VIX) ,
which moves in the reverse direction of the S&P 500 much of the
time, shed 0.7%.
After briefly erasing gains, the Nasdaq Composite (RIXF) held
steady at 3,480.49.
For every two shares in decline, three were on the rise on the
New York Stock Exchange, where 389 million shares had traded as of
2:50 p.m. Eastern.
Composite volume neared 2.1 billion.
On the New York Mercantile Exchange, oil futures for August
delivery (CLQ3) fell eight cents to end at $103.14 a barrel, and
gold futures for August delivery(GCQ3) added $22.20, or 1.8%, to
$1,234.9 an ounce.
The dollar (DXY) gained against other currencies, including the
yen (USDJPY), and U.S. Treasury yields fell, with the benchmark
10-year-note yield (10_YEAR) at 2.652%.
The combination of a strong U.S. currency and low overseas
growth will hurt the international component of earnings, according
to David Kelly, chief global strategist at J.P. Morgan Funds.
"As usual, however, the focus will be on surprises in current
earnings and forward guidance for the rest of the year, both of
which could be relatively positive," Kelly added.
The S&P 500 climbed 1.6% last week after
better-than-expected economic reports curbed worry about a
potential reduction in Federal Reserve stimulus. The central bank's
intentions could become more apparent when the Federal Open Market
Committee releases minutes from its June meeting Wednesday.
The June jobs report had employers adding more jobs than
projected. Other reports showed jobless claims declining and the
manufacturing sector improving.
Dell Inc. shares (DELL) gained 3% after Institutional
Shareholder Services Inc. urged approval of founder Michael Dell's
buyout proposal for the computer company.
Shares of Priceline.com (PCLN) rose 3.3% after Morgan Stanley
upgraded shares to overweight.
In Brussels Monday, European governments agreed to disburse $3.9
billion for Greece, hoping to purchase time in keeping another debt
crisis at bay until after German elections are held in
September.
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