U.S. stocks rallied on Monday, extending a two-week run-up as better-than expected corporate earnings increased investors' optimism.
Earnings from companies, including Gannett Co Inc
So far three out of four earnings have been better than expected, no real horror stories, and at this point (the advance) looks set to continue, said Frank Lesh, broker and futures analyst with Future Path Trading in Chicago.
We still got a couple more weeks to go (in earnings). But so far, so good. The market is telling us to be long and stay long.
As of Monday, 62 companies in the S&P 500 had reported earnings, with 79 percent above analysts' expectations, according to data compiled by Thomson Reuters.
Earnings season heats up this week, with 13 Dow components and 135 S&P 500 companies set to report.
The Dow Jones industrial average <.DJI> gained 112.76 points, or 1.13 percent, to 10,108.67. The Standard & Poor's 500 Index <.SPX> rose 11.54 points, or 1.06 percent, to 1,099.22. The Nasdaq Composite Index <.IXIC> added 19.28 points, or 0.89 percent, to 2,176.08.
Monday's rally occurred on the 22nd anniversary of Black Monday, as October 19, 1987, is known, which was the day the Dow industrials fell more than 22 percent -- still the largest daily percentage drop on record.
Caterpillar led the Dow, gaining 5.6 percent to $57.62 after Bank of America-Merrill Lynch raised its price target to $65 from $52 and increased its 2010 and 2011 earnings per share expectations, citing a faster recovery in machinery revenue next year. Caterpillar is set to report results on Tuesday.
Gannett Co Inc
Diversified manufacturer Eaton Corp
In other news, the Market Vector Agribusiness ETF
Home builders' shares slid, with the Dow Jones home construction index <.DJUSHB> down 1.6 percent.
Frank Husic, managing partner and chief investment officer at Husic Capital Management in San Francisco, said the home building sector's shares were hurt by concerns the current $8,000 tax credit to first-time home buyers, which expires on November 30, would not be extended.
Shares of KB Home
The technology sector will be in focus after the closing bell, as bellwethers Apple Inc
There is anticipation that we're going to get better-than-expected top- and bottom-line results from some companies like Apple, said Joe Arsenio, president of Arsenio Capital Management in Larkspur, California.
(Editing by Jan Paschal)