By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks gained for a third session
on Monday as Wall Street looked to the second-quarter earnings
season.
Alcoa Inc. shares (AA) rose 1.4%. The aluminum producer and Dow
component released its quarterly results after the market
close.
"The early indication is that the rate of change to downward
earnings-per-share guidance after companies report second-quarter
earnings will be less severe than in prior quarters," Nick Raich,
CEO at the Earnings Scout, wrote in an email.
He noted that even if estimate reductions come in only slightly
more than expected, "there is a great chance both sales and
earnings growth will reaccelerate during the second half of
2013."
And, while Alcoa's earnings mark the start of earnings season,
results from major U.S. banks could call the tune in the coming
weeks. (Related blog post: What Alcoa's first-in-line status each
earnings season means.)
After climbing as much as 126 points, the Dow Jones Industrial
Average (DJI) ended up 88.85 points, or 0.6%, at 15,224.69, with
UnitedHealth Group Inc. (UNH) leading the rise that included 28 of
its 30 members.
Chip maker Intel Corp. (INTC) led blue-chip decliners, with its
shares down 3.6% following downgrades by a trio of analysts.
The S&P 500 index (SPX) rose 8.57 points, or 0.5%, to
1,640.46, with utilities pacing gains and telecommunications
leading losses among its 10 major sectors.
"We continue to be stuck in the 1,600 to 1,650 range for the
S&P 500. It's a time to manage risk on individual stocks,
especially as we approach earnings season," noted Elliot Spar,
market strategist at Stifel, Nicolaus & Co.
After briefly erasing gains, the Nasdaq Composite (RIXF) rose
5.45 points, or 0.2%, to end at 3,484.83.
For every two shares in decline, three gained on the New York
Stock Exchange, where nearly 907 million shares traded.
Composite volume neared 3.4 billion.
On the New York Mercantile Exchange, oil futures for August
delivery (CLQ3) broke a four-session streak of gains, falling eight
cents to end at $103.14 a barrel, and gold futures for August
delivery(GCQ3) added $22.20, or 1.8%, to $1,234.9 an ounce.
The dollar (DXY) gained against other currencies, and U.S.
Treasury yields fell, with the benchmark 10-year-note yield
(10_YEAR) at 2.64%.
The combination of a strong U.S. currency and low overseas
growth will hurt the international component of earnings, according
to David Kelly, chief global strategist at J.P. Morgan Funds. "As
usual, however, the focus will be on surprises in current earnings
and forward guidance for the rest of the year, both of which could
be relatively positive," Kelly added.
The S&P 500 climbed 1.6% last week after
better-than-expected economic reports curbed worry about a
potential reduction in Federal Reserve stimulus. The central bank's
intentions could become more apparent when the Federal Open Market
Committee releases minutes from its June meeting Wednesday.
The June jobs report had employers adding more jobs than
projected. Other reports showed jobless claims declining and the
manufacturing sector improving.
Dell Inc. shares (DELL) gained 3.1% after Institutional
Shareholder Services Inc. urged approval of founder Michael Dell's
buyout proposal for the computer company.
Shares of Priceline.com (PCLN) rose 3.9% after Morgan Stanley
upgraded the stock to overweight.
In Brussels Monday, European governments agreed to disburse $3.9
billion for Greece, hoping to purchase time in keeping another debt
crisis at bay until after German elections are held in
September.
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