U.S. stocks rose on Monday in a broad-based rally after corporate results fed growing optimism the accelerating earnings season will be strong.
Better-than-expected earnings from companies including Gannett Co Inc
It's all about earnings, and it's all about momentum, said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville, Tennessee.
Investor optimism is really rising rapidly now for the first time since the March lows, and I think a lot of money is bursting off the sidelines as a result.
The Dow Jones industrial average <.DJI> rose 110.11 points, or 1.10 percent, to 10,106.02. The Standard & Poor's 500 Index <.SPX> gained 11.02 points, or 1.01 percent, to 1,098.70. The Nasdaq Composite Index <.IXIC> put on 22.58 points, or 1.05 percent, to 2,179.38.
Caterpillar led the Dow, gaining 4.9 percent to $57.23 after Bank of America-Merrill Lynch raised its price target to $65 from $52 and increased its 2010 and 2011 earnings expectations, citing a faster recovery in machinery revenue next year. Caterpillar is set to report results on Tuesday.
All 10 of the S&P 500's main sectors were higher on Monday. The broad index has surged about 62 percent from the 12-year lows hit in early March.
Earnings season heats up this week, with 13 Dow components and 135 S&P 500 companies set to report.
Gannett Co Inc
Diversified manufacturer Eaton Corp
Through last Friday, 61 companies in the S&P 500 have reported earnings, with 79 percent of results above analysts' expectations, according to data compiled by Thomson Reuters.
Analysts are especially looking at revenue growth to support expectations the economy is stabilizing after the last two quarters were characterized by cost cutting.
Among the laggards, BB&T Corp
(Editing by Jeffrey Benkoe)