U.S. Stocks Bounce Back From Last Week's Losses

NEW YORK (MarketWatch) -- U.S. stocks rebounded on Monday, with the Dow industrials' triple-digit rise triggered by strong results from International Business Machines Corp., giving an oversold market reason to turn higher.

IBM delivered "a much-needed piece of good news in an otherwise dismal marketplace," said Art Hogan, chief market strategist at Jefferies & Co.

U.S. stocks dropped steeply last week amid worries of a recession, with the Dow socked by its worst first-eight-trading-days-of-a-year run in 17 years.

On Monday, the Dow Jones Industrial Average rose 149 points to 12,755.3, with 25 of its 30 components ahead, led by IBM , up 5.9%, and Hewlett-Packard Co. , up 2.7%.

Shares of Citigroup Inc. were up 0.9% amid reports the bank would announce a write-down of as much as $24 billion and job cuts of between 17,000 and 24,000.

"This is generally in line with expectations and shouldn't have much further market impact," said analysts at Action Economics.

Dow laggards included Merck & Co. , shares of which traded down 1.7% after disappointing results from a study for a cholesterol drug.

Off the Dow, shares of Schering-Plough Corp. also fell, recently off 7.1%, following the results for the jointly-marketed cholesterol-lowering Vytorin. .

The S&P 500 gained 10.95 points to 1,411.97, while the Nasdaq Composite climbed 31.38 points to 2,471.32.

"Analysts currently expect the technology components of the S&P 500 to post fourth quarter profits 23% above year ago levels. Consumer staples, energy, and telecomm stocks are also expected to show year over year profit increases," said Frederic Ruffy, an analyst with Optionetics.

"However, those gains will be offset by sizeable losses in the financials. The S&P 500, as a whole, is expected to post earnings of $20.13 for the fourth quarter 2007, down from $21.99 a year ago," Ruffy said.

Volume on the New York Stock Exchange came to 804 million, and advancing stocks lead decliners nearly 2 to 1. On the Nasdaq, 1.3 billion shares changed hands, and advancers shot past decliners 8 to 5.

In its global equity strategy 2008 outlook, Credit Suisse raised to small overweight its take on the U.S. market, saying the U.S. has "historically outperformed when lead indicators fall because the speed of macro and corporate policy response is best there." .

Big Blue

IBM credited stronger sales in Asia and Europe, as well as rising demand in emerging markets, as catalysts for its preliminary fourth-quarter surprise. The information-technology giant is slated to formally announce financial results on Thursday. .

While IBM led technology stocks higher, leading retail stocks slipped. .

Shares of Sears Holdings Corp. fell 6.2%, retreating as the parent of the Sears and Kmart chains warned fourth-quarter earnings could amount to less than half of last year's. .

Shares of CNet Networks Inc. were up 2.3% in the wake of the company's move to block a group of investors from gaining seats on the company's board. .

And, Germany's SAP AG also gained, recently up 3.8%, after the software giant said it expects fourth-quarter sales to rise 10%, putting its revenue for the quarter ahead of estimates. .

Crude moves

In commodities trading, crude-oil futures advanced, receiving a push from geopolitical tensions -- namely, tensions between the U.S. and Iran as well as unrest in Nigeria.

In recent action, crude for February delivery was up $1.42 at $94.11 a barrel on the New York Mercantile Exchange. Over the past week, crude slipped $5 a barrel to a three-week low.

The dollar pulled lower, pressured by expectations of another U.S. interest-rate cut at the end of the month, with the dollar index, which measures the U.S. unit against a basket of major currencies, at 75.570, down from 76.030 in late trading Friday. .

Energy shares rose along with the price ofcrude, with the Amex Oil Index up 0.7%.

Gold futures rose for a fifth day to an all-time high of $915.90 an ounce in electronic trade. The precious metal was more recently up $6.20 to $903.90 an ounce. .

Overnight, several markets traded lower in Asia, with resource stocks fronting the fallback. .

In Europe, shares looked likely to snap a three-session losing streak, with the pan-European Dow Jones Stoxx 600 index up 0.7%. .

By Kate Gibson