U.S. Stock Indexes Lifted As Oil Falls More Than $4 A Barrel
NEW YORK (MarketWatch) -- U.S. stocks on Monday swung solidly higher as a rising dollar and a drop in commodities prices - including a decline in oil of more than $4 a barrel - helped offset caution about second-quarter earnings season.
"This week's earnings results mark the official start of the earnings season, but outside of General Electric, investors are mainly focusing on the banks and the credit crisis," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
The Dow Jones Industrial Average climbed 82.4 points to 11,370.94, with 21 of its 30 components posting gains.
The blue-chip index's advance was led by Alcoa Inc. were also strongly higher, up 3.9%, ahead of the aluminum producer's earnings report after the close Tuesday.
Also adding support, General Motors Corp. , climbed 3.6%, with shares of the biggest U.S. automaker bolstered by crude's fall and a Wall Street Journal Report that GM is considering more job cuts and whether to close more brands.
Drug manufacturer Merck & Co. Inc. fronted losses on the Dow, its stock down 3.7%, following its downgrade to neutral from buy at UBS.
Shares of Walt Disney Co. also weighed on the Dow, with shares of the entertainment company falling 1.5% after a downgrade by Lehman Brothers.
The S&P 500 gained 7.71 points to 1,270.61, with information technology leading gains among the S&P's 10 industry groups, the sector recently up 1.6%, with only financials falling, recently down 0.4%.
The technology-laden Nasdaq Composite added 21.69 points to stand at 2,267.07, bolstered in part by Microsoft Corp. , which said it is open to discussing a "major transaction" with a new board of directors at Yahoo Inc. .
Shares of Microsoft gained 0.9% while Yahoo soared 9.1%.
Mid-morning volume on the New York Stock Exchange came to 239 million shares, with advancing issues outpacing those declining 8 to 7. On the Nasdaq, 172 million shares traded, and advancers edged just ahead of those declining.
U.S. stocks ended lower during the holiday-shortened week, with the Dow Jones Industrial Average falling into bear-market territory.
Monday's economic calendar was light, with a speech from non-voting San Francisco Fed President Janet Yellen the highlight.
The dollar put on sizeable gains against the Japanese yen and the British pound, and oil futures dropped, with the August contract losing $4.14 to $141.15 a barrel. .
Active issues
The Journal also reported Merrill Lynch & Co. is inching closer to selling ownership stakes in investment manager BlackRock Inc. and information provider Bloomberg LP.
"The still-distressed state of balance sheets at banks and other financial intermediaries suggests the credit creation mechanism is likely to remain impaired for the near future, dulling the impact of Fed rate cuts on the economy," said Lehman Brothers analyst Zach Pandl.
And, General Electric Co.'s NBC Universal led a group buying the Weather Channel in what is expected to be a multi-billion-dollar deal. Terms weren't disclosed.
Germany's Fresenius said it's going to buy APP Pharmaceuticals Inc. for up to $4.6 billion.
InBev announced a rival slate of directors for Anheuser-Busch Companies Inc. that includes Adolphus Busch IV, the uncle of the Budweiser maker's chief executive, August Busch IV.
Merck & Co. Inc. was downgraded to neutral from buy at UBS, while another top drugmaker, AstraZeneca plc , separately was downgraded to hold by Deutsche Bank.
Milwaukee bank Marshall & Ilsley Corp. warned of a provision of at least $900 million in the second quarter to cover loan losses from the slumping housing market.
Teva Pharmaceutical Industries Ltd. shares were as much as 6.8% lower in Tel Aviv after the company said that in a Phase III study, a 40-milligram dose of its Copaxone multiple-sclerosis treatment was no more effective in reducing te relapse rate than the approved 20mg dose.
Overseas, the Nikkei 225 ended a 12-session losing run with a 0.9% rise. In London, the pan-European Dow Jones Stoxx 600 index jumped 1% to 282.43. .
By Kate Gibson