U.S. Stocks Rise After Opening Drop With Economic Data Ahead
NEW YORK (MarketWatch) -- U.S. stocks on Monday wobbled higher after declines at the start, ahead of an index expected to show a decline in U.S. manufacturing activity in October and as the race for the White House nears the finish line.
After initial losses, the Dow Jones Industrial Average advanced 60.45 points to 9,385.46, with 23 of its 30 components posting early gains.
The S&P 500 gained 6.12 points to 974.87, while the Nasdaq Composite picked up 12.13 points to 1,733.08.
Materials, industrials and telecommunication services shares led the early gains, with utilities and energy the lagging sectors.
U.S. stocks closed their worst month in 21 years with a big rally last week: The Dow industrials rose 11.3%, the S&P 500 added 10.5% and the Nasdaq Composite rose 10.9%, as investors looked past the gloom from corporate profits and economic indicators and at signs showing thaws in the credit crunch.
Illustrating the point, the three-month LIBOR rate for dollar loans dropped for the 16th time in a row, falling below 3%.
"We are seeing some easing of the credit crisis," said Paul Nolte, director of investments at Hinsdale Associate. "But we'll continue to have lousy economic numbers for at least the next three to six months, if not more, and earnings will be the same."
A Wall Street Journal/NBC News poll finds Democrat Barack Obama with a 51%-to-43% lead against Republican John McCain.
The Institute of Supply Management's manufacturing index for October is due for release at 10 a.m. Eastern, with the gauge expected to drop.
Monthly auto sales also are on tap, with blue chip General Motors Corp. seen registering a drop in sales of up to 50%. GM shares gained 3.6%.
"I'm going to go out on a limb here, but my guess is that the tightening of credit standards for auto financing and the general level of activity about the economy might make it gough to beat last month's domestic sales figure of 9.1 million," said Kevin Giddis, head of fixed income, Morgan Keggan & Co.
Two Dow industrial components saw rating changes, as Wal-Mart Stores Inc. was upped to overweight by J.P. Morgan, while Boeing Corp. was downgraded to conviction sell by Goldman Sachs.
In a lighter pre-open schedule for earnings reports, Rockwell Collins Inc. said fourth-quarter earnings climbed 17%. But, the aerospace technology company also lowered its 2009 outlook.
After gaining almost 6% last week, crude-oil futures declined in early action on the New York Mercantile Exchange, with the benchmark December contract falling $2.13 to $65.68 a barrel. .
Gold futures rose for the first session in three days, as investors snapped up the precious metal after its biggest monthly loss in 25 years. Gold for December delivery rose $13.30 to $731.5 an ounce on the Nymex.
The FTSE 100 rose 0.4% in London, .
And overnight, the Hang Seng added 2.7% in Hong Kong, while Japanese markets were closed.
By Kate Gibson