Stocks rebounded from earlier losses to finish modestly higher Monday in light trading on the Columbus Day holiday. The bond markets were closed.
Any buying mood among equities, though, was restrained as investors awaited quarterly profit reports from blue-chip companies. Adding to the cautious mood were the bomb attacks in the Indonesian resort of Bali over the weekend.
The Dow Jones industrial average gained 27.11 points, or 0.35%, to 7,877.40. The tech-heavy Nasdaq composite index was up 10.06 points, or 0.83%, to 1,220.53. And the broader Standard & Poor's 500-stock index added 6.12 points, or 0.73%, to 841.44.
Among Monday's stocks in the news, Merrill Lynch cut its investment ratings on General Motors (GM) and Ford Motor (F) and two of their biggest suppliers, saying lower vehicle prices would crimp profit, a warning that sent their stocks lower, according to wire-service reports.
In energy, utility TXU (TXU) cut its quarterly dividend 79% to ensure that its credit and liquidity position remains strong. The company said it would aggressively cut costs and offer all or portions of its European business for sale, according to wire-service reports. The shares ended the session with steep losses.
Shares of drugmaker Andrx (ADRX) plunged after the company said that a judge ruled that it had infringed on patents held by AstraZeneca (AZN) for Prilosec.
And Knight Ridder (KRI), the second largest U.S. newspaper publisher, reported a small increase in third-quarter earnings and reaffirmed its fourth-quarter forecast Monday, despite continued sluggish revenues and advertising.
In commodities, oil futures were slightly lower despite the Bali bomb explosions. Indonesia's defense minister blamed al-Qaida and its extremist allies on Monday for the attack that killed more than 180 people -- many of them Australian tourists -- at the nightclub, according to wire-service reports.
U.S. Treasuries were closed Monday in observance of the Columbus Day holiday.
When the markets reopen on Tuesday, investors will look to a fresh round of economic data including a report on September industrial production. The August update showed a decline in factory output. Another decline would suggest that the economic recovery is stumbling.
Reports on housing, unemployment and manufacturing are due on Thursday. The latest read on consumer price index, a measure of inflation at the retail level, is expected to show a modest increase in September.
European markets finished lower. In London, the Financial Times-Stock Exchange 100 index shed 21.80 points, or 0.55%, to 3,931.60, on profit taking. In France, the CAC 40 lost 17 points, or 0.59%, to 2,885.27, as investors moved profits off the table. And in Germany, the DAX Index was down 80.63 points, or 2.75%, to 2,850.11, amid worries about the health of the German banking system.
In Asia, the markets were closed for national holidays. The Nikkei was closed on Monday for Health-Sports Day. On Friday, the Nikkei added 89.99 points, or 1.07%, to 8,529.61. Meanwhile, the Hong Kong market was closed for the Chung Yeung festival. On Friday, the Hang Seng index gained 107.04 points, or 1.21%, to 8,965.73.