Stocks rallied Monday, after a wobbly start, as investors were optimistic about the slew of earnings ahead.
Major indexes hit new highs for the year. The Dow Jones Industrial Average gained 96.28, or 1 percent, to close at 10,092.19. Earlier, the index had topped that mark, and the S&P 500 rose above 1,100 for the first time in a year.
The S&P 500and Nasdaq each gained about 0.9 percent.
Today's rally was a stark contrast to this day 22 years ago, when it was the infamous crash of 1987. If the Dow were to have that big of a crash in today's market, it would shave 2,200 points off the index.
The Dow's run today was led by Caterpillar and American Express , 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.
Oil hit a new high for the year, settling at $79.61 a barrel. It was the eighth straight day oil has climbed—it's gained 14 percent during this streak.
The market was buzzing about news that billionaire investor Carl Icahn has offered to underwrite a $6 billion loan to commercial lender CIT Group . 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. CIT shares gained 8 percent to $1.21.
Plus, news that a well-known hedge-fund manager was arrested for insider tradingsent a ripple up and down Wall Street.
Amgen was one of the biggest percentage decliners in the Nasdaq 100, down 1.8 percent, after the drug maker said regulators have delayed approval of its new osteoporosis medication, denosumab.
General Electric shares fell 1.5 percent as the fate of the company's NBC Universal unit hung in the balance. The conglomerate and Vivendi are still $500 million aparton what Vivendi should be paid for NBC Universal, the Wall Street Journal reported this weekend. NBC Universal is the parent company of CNBC.
Some big bank stocks retreated, with Bank of America , Citigroup and JPMorgan all lower.
In the day's earnings news, Hasbro beat on earnings, helped by demand for movie-related toys, but missed on revenue. Shares fell 4.1 percent.
Regional bank BB&T 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 dropped 4.6 percent.
Shares of Eaton jumped 5.8 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 and Motorola rose after an offensive line drive of ads for their Droid phone during Sunday football. Verizon Wireless 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.
Apple shares had opened lower ahead of its earnings, which came after the bell, but rebounded by midday, ending up 1 percent at $189.86.
Apple shares soared to an all-time high in after-hours trading after the company crushed earnings expectations: Earnings of $1.82 a share, on revenue of $9.87 billion. Analysts had expected $1.42 a share on revenue of $9.21 billion, according to Thomson Reuters.
Texas Instruments also blew past expectations— even on revenue — sending shares higher after-hours.
This will be a crucial week for earnings — and the market. Strong results from companies including Alcoa and JPMorgan gave investors cause for optimism this quarter, but if companies start missing the hyped-up whisper numbers, it could derail the market rally.
"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 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.
So far, 79 percent of companies that have reported earnings have beat analyst estimates, according to Thomson Reuters.
At least a dozen banks report this week, including Morgan Stanley , Wells Fargo and Regions Financial .
In a speech today, Fed Chairman Ben Bernanke warned that moves by Asian nations to promote exports could skew trade balances. He urged the U.S. to work on cutting its record budget deficitand encouraged China to get its citizens to spend more.
— Reuters contributed to this article.
TUESDAY: Housing starts; producer prices; Madoff sons hearing; report on college pricing; Fed's Plosser speaks; Earnings from Caterpillar, Coca-Cola, DuPont, Pfizer, United Technologies, Lockheed Martin, Regions Financial, SanDisk, Seagate, Yahoo
WEDNESDAY: Weekly mortgage apps; weekly crude inventories; Fed's beige book; Fed's Rosengren speaks; Earnings from Boeing, Eli Lilly, Wells Fargo, Altria, AMR, Continental, Morgan Stanley, USBancorp and eBay
THURSDAY: Weekly jobless claims; leading indicators; Fed's Rosengren, Lockhart and Dudley speak; Earnings from AT&T, Bristol-Myers, McDonald's, Merck, MMM, Travelers, UPS, Schering-Plough, Xerox, Amazon, AmEx, Braodcom and Capital One
FRIDAY: Fed chief Bernanke speaks; existing-home sales; Fed's Kohn speaks; Earnings from Microsoft, Honeywell and Ingersoll-Rand
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