Stocks ended higher on Monday, but gains were held in check as investors awaited the start of the second-quarter earnings season.
"It's definitely news-driven today -- it helps that oil is down today," said Joe Ranieri, managing director of NASDAQ trading at Canaccord Adams. "We're getting into earnings season, and what we've seen so far is good, so we think there is going to be an upward bias. It's good but scary."
The Dow Jones Industrial Average ended with gains of about 38 points, or 0.28%, which outpaced smaller gains for the S&P 500 and the Nasdaq Composite.
The Dow ended about 26 points below its record high made on June 6, while the S&P 500 closed less than 8 points off its previous historic high.
Andrew Bekoff, chief market strategist at Printz Capital Management said recent weakness in the dollar should be "supportive to shares of multinational companies' bottom lines."
Bekoff said rallying global equities markets and strong buyout activity are helping U.S. stocks.
Earnings season officially got underway after Monday's close of trading when aluminum company Alcoa reported quarterly earnings consistent with expectations. This quarter, market analysts expect earnings for S&P 500 companies to decline 4.4% from the year-ago period, according to Thomson Financial.
New York light sweet crude futures snapped seven straight sessions of gains, ending down 0.9% to $72.19. Crude oil remains up 18% year to date.
On the merger and acquisitions front, a long-running takeover battle may be about to come to an end. Analysts expect shareholders of CBOT Holdings to vote in favor of a sweetened offer from Chicago Mercantile Exchange Holdings . The CME offer is valued at $11.9 billion. IntercontinentalExchange decided against sweetening its own bid for CBOT, according to news reports.
Trading breadth was neutral with advancing stocks running even with decliners. A similar scenario played out on a sector-by-sector basis, with decliners equaling gainers among the 10 economic sectors tracked by S&P.
In other merger news, Dow Jones prepared to meet with supermarket billionaire Ron Burkle in what could be a last-ditch attempt to muster up a rival offer and trump News Corp.'s bid, Reuters reported Sunday, citing a source familiar with the situation.
Boeing's 787 Dreamliner made its debut Sunday in front of 15,000 cheering employees, customers and suppliers. The launch comes amid a surge in orders for the carbon-composite aircraft.
European Stocks Slightly Higher
European stock markets made modest gains Monday, picking up from a solid performance Friday, but thin corporate and economic news suggested upside potential was limited.
The London FTSE-100 and Paris CAC-40 were slightly higher, while the Frankfurt DAX made a firmer advance.
Plane makers were in the spotlight as the delayed Airbus A350 faced a further hold up from an escalating dispute between the EADS-owned company and jet-engine supplier General Electric, the Wall Street Journal reported Monday.
Meanwhile shares in Univar soared 36% as the recent surge in merger and acquisition activity continued with the Dutch chemical distributor recommending a $2.04 billion cash bid from private equity firm CVC Capital Partners to shareholders.
And German insurer Allianz said it would be open in principle to a takeover by Russian or Chinese private-sector investors, Chief Executive Michael Diekmann said in an interview with German newspaper Welt am Sonntag.
Asian Stocks Rally
Asian stocks were stronger in the afternoon session Monday with Japan closing at a seven-year high and Seoul's hitting its fourth consecutive record on strong U.S. jobs data on Friday, better than expected Japanese machinery orders and oil companies surging on soaring crude prices.
High-tech stocks such as Tokyo Electron drove the Nikkei 225 Average to its highest close in more than seven years following a rise in
U.S. stocks as a strong jobs report there reassured investors about the economy. A stronger-than-expected reading in Japanese machinery orders data also pushed up machinery stocks such as industrial robot maker Fanuc.
Shares of Sony ended down slightly after the company announced plans to cut the price of its PlayStation 3 consoles in the United States by $100, or 17%, to $500.
South Korean shares surged to a fourth consecutive record close as Daewoo Shipbuilding jumped 6% after raising its target for new orders and announcing its latest ship deal, confirming optimism about the sector.
China's Shanghai Composite Index rose more than 2.5%, extending gains in the previous session. Gains were due, in part, to news China would require government approval for large sales of state-owned shares in publicly traded companies.
Hong Kong shares leapt 1.3% as local lenders and other underperforming blue chips were swept up in a rally. Blue-chip conglomerate Hutchison Whampoa advanced to fresh six-year highs, while Hong Kong railway operator MTR rose in heavy trade. Blue chip insurance company China Life traded near all-time highs.