Stocks rose on Monday as investors bet on a strong corporate earnings season, which Alcoa Inc
Profits for S&P 500 companies are seen rising 11.4 percent from a year ago, according to Thomson Reuters data, which has generated optimism and contributed to the market's recent gains despite turmoil in oil-producing regions and disasters in Japan.
The S&P 500 index is up 5.8 percent since the start of the year, prompting some speculation that part of the anticipated growth in profits has already been priced into shares.
Alcoa rose 0.8 percent to $18.07. The aluminum maker is the first Dow component to report and is seen posting growth in both earnings and revenue. JPMorgan Chase & Co
The major companies reporting this week will give us a nice slice of what to expect this season, and if we get follow-through in the results, this could be the catalyst that finally gets more people back in the market, said Mike Shea, managing partner and trader at Direct Access Partners LLC in New York.
Shea expects trading volume, which has been among the lowest of the year in recent weeks, to pick up following the initial results. That will mean more volatility, which will pull both the long side and short side into the market, he said.
The CBOE Volatility index <.VIX> fell 8.8 percent on Monday.
The Dow Jones industrial average <.DJI> was up 54.00 points, or 0.44 percent, at 12,434.05. The Standard & Poor's 500 Index <.SPX> was up 3.26 points, or 0.25 percent, at 1,331.43. The Nasdaq Composite Index <.IXIC> was up 1.58 points, or 0.06 percent, at 2,782.00.
NYSE shares fell 1.9 percent to $37.97 while Nasdaq OMX fell 1 percent to $28.17 and ICE rose 0.7 percent to $121.36.
Also in deal news, Endo Pharmaceuticals Holding Inc
Endo rallied 5.1 percent to $42.99 while American Medical jumped 32.1 percent to $29.50. Level 3 rose 9.7 percent to $1.58 and Global Crossing surged 55 percent to $22.98.
Biogen Idec Inc
(Editing by Kenneth Barry)