U.S. Stocks End Higher, Investors Cheered By IBM Results
NEW YORK (MarketWatch) -- U.S. stocks closed higher on Monday, with the Dow industrials' triple-digit rise triggered by strong results from International Business Machines Corp., helping propel an oversold market 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 171.9 points to end at 12,778.2, with 26 of its 30 components ahead, led by IBM , up 5.4%, and Hewlett-Packard Co. , up 2.5%.
Shares of Citigroup Inc. were up 1.8% 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 closed down 1.3% after disappointing results from a study for a cholesterol drug.
Off the Dow, shares of Schering-Plough Corp. fell 8% following the results for the jointly-marketed cholesterol-lowering Vytorin. .
The S&P 500 gained 15.23 points to 1,416.25, while the Nasdaq Composite climbed 38.36 points to 2,478.30.
On the New York Mercantile Exchange, crude oil rose for the first time in four sessions, with futures for February delivery ending up $1.51 at $94.20 a barrel. .
Gold futures rose for a fifth session and closed above $900 for the first time, ending up $5.7 at $903.4 an ounce. .
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Volume on the New York Stock Exchange topped 1.4 billion, and advancing stocks led decliners more than 2 to 1. On the Nasdaq, nearly 2.2 billion shares changed hands, and advancers shot past decliners 9 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 6.4%, 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 3.7% 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 gained 4.2% after the software giant said it expects fourth-quarter sales to rise 10%, putting its revenue for the quarter ahead of estimates. .
The dollar pulled lower, pressured by expectations of another U.S. interest-rate cut at the end of the month. .
Energy shares rose along with the price of crude, with the Amex Oil Index up 1.2%.
Overnight, several markets traded lower in Asia, with resource stocks fronting the fallback. .
European shares snapped a three-session losing streak, help by strong gains in the tech sector. .
By Kate Gibson