U.S. stocks tick up on hopes for earnings

NEW YORK (MarketWatch) -- U.S. stocks tallied mild gains Monday as Wall Street looked to third-earnings reports from a handful of industry titans, while weighing potential moves by the Federal Reserve.

"There is a real competition between the glass is half-empty and half-full" points of view, said Sandy Lincoln, chief investment strategist at M&I Investment Management.

"It's still early in the reporting season, but so far two out of three companies are giving us positive earnings surprises. If that were to persist, it would be a pretty robust outcome," he added.



After closing above 11,000 on Friday for the first time since the May 6 "flash crash," the Dow Jones Industrial Average was up 15.89 points at 11,022.44, with 20 of its 30 components rising.

Three Dow components, Intel Corp. , J.P. Morgan Chase & Co. and General Electric Co., are scheduled to report quarterly results in the days ahead.

The S&P 500 Index added 2.58 points to 1,167.73, with technology shares leading gains and industrials the sole laggard among its 10 industry sectors.

The Nasdaq Composite Index advanced 9.62 points to 2,411.53.

Bad news good?

After Friday's employment report had the U.S. economy creating fewer private-sector jobs in September than anticipated, Wall Street climbed on thinking the report bolstered chances that the Fed would buy more debt.

But M&I Investment's Lincoln was not among those cheering a further easing of monetary policy by the central bank. "Normally the Fed is very cautious about moving before the evidence is in, and now we're in this vague area between recovery and expansion. My dream scenario is the Fed would do nothing," he said.

"Or B, if whatever the Fed does is relatively modest and targeted, so they do not send a message like there is a fire in the theater," commented Lincoln, who believes there is a reasonable chance for the economy to get show a decent rate of growth going into 2011.

For every two stocks falling three gained on the New York Stock Exchange, where 423 million shares traded as of 12:45 p.m. Eastern.

On the New York Mercantile Exchange, gold rose nearly $5 to $1,350 an ounce, while crude edged lower to $82.1 a barrel.

The bond market was closed for Monday's Columbus Day holiday.

Economic news will step up later in the week, with reports on first-time jobless claims, consumer confidence and inflation among those coming.

Shares of Gymboree Corp. jumped 23% after Bain Capital agreed to acquire the children's clothing retailer for $1.8 billion.

Chesapeake Energy Corp. rose 2.2% after China's Cnooc Ltd. said it would acquire one-third of the company's Eagle Ford shale project in Texas.

The dollar on Monday gained against the euro and Japanese yen after steadily dropping in recent weeks against both currencies.

During the weekend, a meeting of the International Monetary Fund and Group of 20 finance ministers failed to reach any new accords regarding recent currency moves.