Stocks Get a Second Wind

Updated from 4:09 p.m. EDT

The major averages managed to close at session highs Monday, after a mixed session.

The Dow Jones Industrial Average rose 56 points, or 0.6%, to 9777.94, while the Nasdaq gained 13 points, or 0.7%, to 1925.14. The S&P 500 climbed 5 points, or 0.5%, to 1044.67.

"What is spurring this market is that third-quarter earnings continue coming in above expectations. The lack of a pullback is remarkable. People don't want to let go," said Larry Wachtel, market analyst at Wachovia Securities. "But we are clearly overextended, so I can't envision the market moving straight up from here."

Around a third of S&P 500 companies have reported earnings, with profit increasing 16.5% on average, according to Thomson First Call. Analysts expect earnings to have risen 18.1% after all S&P members have reported results.

In economic news, the Conference Board released its index of leading economic indicators, which showed a 0.2% decline in September. The drop followed a 0.4% rise the previous month and was slightly worse than the 0.1% drop expected.

Almost 1.2 billion shares traded hands on the New York Stock Exchange, and 1.5 billion shares traded on the Nasdaq. Advancers were practically even with decliners on both bourses.

In earnings news, Citigroup(C Quote) said it earned $4.69 billion, or 90 cents a share, in the third quarter, up 20% from $3.92 billion, or 76 cents a share, a year earlier. Analysts had expected earnings of 85 cents a share, according to Thomson First Call. Nonetheless, Citigroup lost 36 cents, or 0.7%, to $48.02.