NEW YORK (AP) – Investors attracted by lower prices but still wary of first-quarter earnings sent stocks soaring Monday, a break from last week’s declines. The Dow Jones industrials climbed more than 140 points but volume was light, a sign that many investors want to see more profit reports before making any major moves.
“I think guys are going to stay flexible until they see some conviction. There is a reluctance by large institutions to really commit to the market. This isn’t a momentum driven market,” said Michael Murphy, head trader at Wachovia Securities.
Although stocks were quite a temptation, Wall Street was still concerned after hearing companies say first-quarter and yearly results will be soft. The market is again focused primarily on earnings and economic news, paying less attention to the war in Iraq now that allied success seems assured.
Amid extremely light trading, the Dow closed up 147.69, or 1.8 percent, at 8,351.10, according to preliminary calculations. The blue chips more than erased last week’s loss of 0.9 percent.
The broader market also finished sharply higher. The Nasdaq composite index rose 26.10, or 1.9 percent, to 1,384.95. The Standard & Poor’s 500 index advanced 16.93, or 2 percent, to 885.23.
The gains put the Dow and the S&P 500 back into positive territory for the year. The Nasdaq has been in positive ground more the past month.
Despite Monday’s advance, analysts don’t expect many big upswings on Wall Street for quite a while. But they predict the market will hold up rather well in the coming weeks as companies report their results; analysts say the numbers will look far better than those of last year’s first quarter.
“The markets have some reasonably good comparisons to work off of and expectations are fairly low. And, that that being the case, we might get through this earnings season without too much psychological damage or market damage,” said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif.
Monday’s rally came amid reports of heavy warfare in Iraq with Marines overtaking pockets of resistance in Saddam Hussein’s hometown of Tikrit. Maj. Gen. Stanley McChrystal said, “I would anticipate that the major combat operations are over.”
Still his assessment had little effect on trading as investors have already anticipated success in Iraq, sending stocks higher during earlier fighting.
In economic news Monday, the Commerce Department reported business inventories grew by 0.6 percent in February, while sales declined by 1 percent, the biggest drop since November 2001.
Citigroup climbed $1.08 to $38.43 after posting first-quarter earnings that surpassed analysts’ expectations by 2 cents a share. Bank of America rose 66 cents to $72 on profits that beat Wall Street’s forecast by 11 cents a share.
IBM advanced $1.32 to $80.07 in advance of its earnings report scheduled to be released later Monday. After the market closed, IBM posted profits of 79 cents a share, a penny shy of expectations. Its stock fell 17 cents in the after-hours trading session.
Intel rose 40 cents to $17.16 ahead of its quarterly results due out Tuesday.
But Abercrombie & Fitch fell 20 cents to $31.20 and Coach declined 8 cents to $38.42 after Merrill Lynch downgraded the retailers.
Advancing issues outnumbered decliners 3 to 1 on the New York Stock Exchange. Consolidated volume was very light at 1.38 billion shares, below Friday’s thin 1.39 billion.
The Russell 2000 index, which tracks smaller company stocks, rose 6.31, or 1.7 percent, to 377.61.
Overseas, Japan’s Nikkei stock average finished Monday up 1.7 percent. In Europe, France’s CAC-40 climbed 1.3 percent, Britain’s FTSE 100 rose 1.1 percent and Germany’s DAX index gained 1.6 percent.
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AP-ES-04-14-03 1737EDT
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