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CNBC ON DIGG

Dow Up Over 100 Points, Led by CAT

Published: Monday, 19 Oct 2009 | 1:48 PM ET

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By: Cindy Perman
CNBC.com

Stocks rallied Monday, after a wobbly start, as techs dragged but investors were optimistic about the slew of earnings ahead.

The Dow jumped more than 100 points, topping 10,100. the run was led by Caterpillar [CAT Loading... () ] and American Express [AXP Loading... () ], both of which report earnings later this week.

RBC Capital initiated coverage of Caterpillar and six other equipment makes with an "outperform" rating, saying they are among the best-positioned to benefit from global growth.

Fast fact: On this day 22 year ago was the infamous crash of 1987. If the Dow were to fall a similar percentage as it did that day, we'd be looking at a 2200 point drop.

Major U.S. Indexes

.DJIA

.NCOMP

.SPX

Oil hit a new high for the year above $79 a barrel, then pulled back slightly.

The big buzz of the market was that billionaire investor Carl Icahn has offered to underwrite a $6 billion loan to commercial lender CIT Group [CIT Loading... () ]. In a letter to CIT's board, Icahn complained that negotiations between the company and its largest creditors have become too expensive and damaging to other bondholders.

Amgen [AMGN Loading... () ] was one of the biggest percentage decliners on the Nasdaq after the drug maker said regulators have delayed approval of its new osteoporosis medication, denosumab.

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General Electric shares [GE Loading... () ] wobbled as the fate of its NBC Universal unit hung in the balance. The conglomerate and Vivendi are still $500 million apart on what Vivendi should be paid for NBC Universal, the Wall Street Journal reported this weekend. NBC Universal is the parent company of CNBC.

In the morning's earnings news,

Hasbro [HAS Loading... () ]

beat on earnings, helped by demand for movie-related toys, but missed on revenue

Regional bank BB&T [BBT Loading... () ] reported that third-quarter profit decreased by 56 percent, but said early indicators of problem loans were largely stable compared with the second quarter.

Shares of Eaton [ETN Loading... () ] jumped 6 percent after the diversified manufacturer reported a sharp drop in profit but beat expectations and said it's seeing early signs of recovery in its markets.

Google [GOOG Loading... () ] and Motorola [MOT Loading... () ] surged after an offensive line drive of ads for their Droid phone during Sunday football. Verizon Wireless [VZ Loading... () ] will begin selling the phone Oct. 30.

The phone has gotten some rave reviews about its speed, among other things, and one analyst said "Android adoption is about to explode." But analysts said Apple has already sold so many phones, it won't be easy to pry market share away from the iPhone titan.

After the bell today, Apple [AAPL Loading... () ] reports earnings. Analysts expect the iPod maker to "handily beat" expectations amid strong margins. Apple shares had opened lower but rebounded by midday.

We'll also get reports from Boston Scientific [BSX Loading... () ]; Texas Instruments [TXN Loading... () ].

This will be a crucial week for earnings — and the market. Strong results from companies including Alcoa [AA Loading... () ] and JPMorgan [JPM Loading... () ] gave investors cause for optimism this quarter, but if Apple, Caterpillar or some of the other big names reporting this week miss, it could turn the tide.

"As we get further through the earnings season, you're seeing whisper numbers rise," Bruce Zaro, chief technical strategist at Delta Global Advisors, told Reuters. "So, if companies don't blow out earnings, their stocks are going to see a selloff."

That's exactly what happened to Goldman Sachs [GS Loading... () ] last week: After JPMorgan's stellar report, the whisper numbers crept higher. Then, when Goldman delivered a solid, but not blockbuster, report, the stock — and other financials — sold off.