Stocks closed Monday with small to moderate gains, led again by the Nasdaq which finished 1.2% higher amid bullish expectations for technology companies' fourth-quarter earnings reports.
The Dow Jones industrial average was up 26.2 points, or 0.25%, to 10,485.18. The broader Standard & Poor's 500 index rose 5.37 points, or 0.48%, to 1,127.23. The tech-heavy Nasdaq composite index jumped 24.86 points, or 1.19%, to 2,111.78, thanks to gains in Internet, semiconductor and networking stocks.
Investors will have plenty of profit news to analyze over the next few weeks. The December-quarter earnings season gets into high gear this week, with releases coming from widely-followed companies such as Intel (INTC ) on Wednesday and General Electric (GE ) on Friday. In general, expectations are high for the quarter, according to Standard & Poor's MarketScope.
Companies scheduled to report earnings Tuesday include Accenture (ACN ), Linear Technology (LLTC ), State Street (STT ), and AmSouth Bancorp (ASO ).
On Monday, the losing sectors were aluminum, gold, and retail.
Along with many technology stocks, health-care facilities stocks rose on news that Triad Hospitals (TRI ) raised its earnings quidance. It sees fourth-quarter EPS from continuing operations (excluding refinancing costs) of 47 cents to 49 cents, and $2.28 to $2.36 2004 EPS from continuing operations on net revenue of $4.3 billion to $4.5 billion.
One winner was MGIC Investment (MTG ), after the mortgage insurance provider posted better than expected fourth-quarter EPS of $1.05, vs. $1.37 a year ago, on an 8.1% total revenue rise.
Yahoo! (YHOO ) shares rose after SoundView raised earnings estimates and $48 price target to $56. SoundView reiterated its outperform rating on the stock.
SunTrust Banks (STI ) reported a better-than-expected fourth-quarter profit of $1.21 per share, vs. $1.20 a share a year earlier. The bank says it's on track to return to historical performance levels.
Countrywide Financial (CFC ) tightened its 2003 EPS range to $12.30 to $12.45 (post stock split) vs. its previous $12 to $13.50 forecast. The mortgage services provider says as anticipated, refinance activity declined during the fourth quarter due to higher mortgage rates. It reaffirmed $9 to $12 2004 EPS (post split).
Merck (MRK ) was lower after CSFB downgraded the shares, citing, among other things, weak growth in the company's core domestic drug lines.
Computer Associates (CA ) says it received a Wells notice from the SEC, indicating that a civil suit for possible violations of laws could arise from its premature recognition of revenue from software license contracts in its fiscal year 2002.
Adecco (ADO ), the world's largest staffing provider, found "material weakness in internal controls" at its North American business and possible accounting irregularities elsewhere, according to news reports. The Swiss company's shares plunged on the European exchanges. It does not expect an audit of its 2003 financial statements to be completed by its auditors by the previously announced release date of Feb. 4.
Treasuries finished flat, as large, late option-related selling reversed the rally that had been in place for most of the session, notes economic research outfit MMS/Informa. The yield on the 10-year note settled at 4.09%.
There are no major economic reports until Wednesday's producer price index and merchandise trade.
European stock markets finished lower Monday. London's Financial Times-Stock Exchange 100 index fell 16.7 points, or 0.37%, to 4,449.6. In Paris, the CAC 40 declined 14.7 points, or 0.41%, to 3,560.1. Germany's DAX index was down 20.27 points, or 0.5%, to 3,995.91.
Asian markets finished mixed Monday. In Japan, the Nikkei 225 index rose 127.4 points, or 1.18%, to close at 10,965.05. Tech stocks like Canon and Sony benefited from follow-through buying. According to traders who deal with the central bank, the Bank of Japan intervened in the currency markets again as it continued to buy U.S. dollars in an attempt to cap the rise in the yen.
In Hong Kong, the Hang Seng index fell 33.58 points, or 0.25%, to close at 13,352.22.