Stocks Rise Ahead of Earnings; Techs Gain
Stocks rebounded Monday as techs gained ahead of some key earnings from the sector this week.
More than two-thirds of the Dow components finished higher, led by Intel , Boeing and Alcoa.
The S&P 500 and Nasdaqalso rose, with the tech-heavy Nasdaq the best performer of the three. The CBOE volatility index, widely considered the best gauge of fear in the market, was below 26 at the closing bell.
Market pros say this market is bound to grow and investors should start taking advantage of some of the low valuations.
“The market is about 30 percent below fair value, so stocks are on sale and we expect the rally we had over the last year to resume through the remainder of this year,” Craig Callahan, founder and president of ICON Adviser told CNBC.
Boeing got a boost after the aerospace giant secured an order from Emirates Airways for 30 777 jets with a potential value of more than $9 billion at the At the Farnborough Airshow.
Techs advanced, with Motorola up 5.6 percent and Qualcomm up 2.3 percent.
Motorola is apparently close to selling its wireless equipment divisionto Nokia Siemens for $1.2 billion.
But Apple shares fell nearly 2 percent after the company last week said it would give iPhone 4 customers a free caseto help correct a glitch that causes calls to be dropped.
Shares of IBM and Texas Instruments rose ahead of the tech companies' earnings reports after the bell today.
Earnings kick into high gear this week, with tech titans Apple, Yahoo, Qualcomm and Microsoft all scheduled to report results.
In addition, other notable companies reporting earnings this week include: GoldmanSachs, Johnson & Johnson, MorganStanley, Coca-Cola, Caterpillar, UPS, Ford and McDonald's.
So far, approximately 15 percent of the companies in the S&P 500 have reported earnings and about 60 percent of these companies have beaten estimates, according to Sam Stovall, chief investment strategist at Standard & Poor's.
However, Stovall said most companies are expected to report lower revenue numbersthan expected.
“And that’s where most analysts are going to be forecasting on their guidance...So in general, if we don’t see a better revenue picture, we can see more days like Friday,” he warned, referring to last week's drastic selloff.
Meanwhile, financials were among the sector laggards, after being last week's worst performers.
Bank of America was down almost 4 percent after at least four brokerages cut their price targets on the financial giant. Rivals JPMorgan and Morgan Stanley were also lower.
Regionals including Fifth Third and Zions Bancorp were trading lower. Zions is also scheduled to report earnings after the closing bell today.
In the day's economic news: A gauge of homebuilder sentiment fell to 14 in July, its lowest level in more than a year, according to the National Association of Home Builders.
Homebuilder stocks fell following the news: D.R. Horton , Toll Brothers and Lennar were trading lower.
Earlier, the National Association for Business Economics said 31 percent of businesses added workersbetween April and June, the highest level in three years, according to its latest survey. And 39 percent of those surveyed said they plan to hire more workers in the next six months — the most since January 2008.
Still, while companies grow more optimistic, a report last Friday showed consumer sentiment has fallen to its lowest level in nearly a year.
BP shares slid following reports that engineers detected some seepage near BP's sealed oil well. For now, BP is being allowed to keep the well sealed while further tests are conducted. In addition, Transocean shares plunged more than 7 percent.
Meanwhile, oil prices slipped to $76.54 a barrel, after rising earlier. Gold prices fell to $1,181.70 an ounceand the dollar fell against the euro.
Halliburton shares jumped more than 6 percent after the oil-services provider delivered earnings that surprised to the upsidebut investors remained worried that the company could get hit later in the year from a ban on deepwater drilling in the wake of the Gulf of Mexico oil spill.
And Delta Airlines swung to a profit but revenue missed its target, sending the stock down about 3 percent.
MONDAY: Earnings from IBM and Texas Instruments
TUESDAY: Housing starts; earnings from Goldman Sachs, Pepsi, State Street, Apple and yahoo
WEDNESDAY: Weekly mortgage applications; Bernanke testifies before Congress; weekly crude inventories; earnings from Coca-Cola, Morgan Stanley, UTX, Wells Fargo, USBancorp, eBay and Qualcomm
THURSDAY: ECB meeting; weekly jobless claims; Fed's Dudley speaks; existing-home sales; leading indicators; earnings from AT&T, Caterpillar, 3M, Travelers, UPS, BB&T, Fifth Third, KeyCorp, Nokia, PNC Bank, SunTrust, Amazon, American Express, Microsoft and Capital One
FRIDAY: EU bank stress-test results; earnings from Ford, McDonald's
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