Updated from 4:08 p.m. EDT
Stocks in the U.S. closed firmly higher Monday as traders overcame their early tentativeness and looked for bargains in the wake of last week's selloff.
The major averages alternated between positive and negative territory before going to the upside for good around midday. The
Dow Jones Industrial Average
rose 92.84 points, or 0.7%, to 13,358.31, and the
added 14.96 points, or 1.03%, at 1473.91.
climbed 21.04 points, or 0.82%, to 2583.28, helped by gains of 2% or more in
For the bulls, who watched Thursday and Friday as mounting worries about the credit market crushed stock indices, the ascent was a welcome development. The Dow lost 208.10 points, or 1.54%, to 13,265.47 on the final day of trading last week -- a pullback that followed a decline of more than 300 points the day before.
Also last time out, the S&P 500 dropped 23.71 points to 1458.95, and the Nasdaq sank 37.10 points to 2562.24.
Paul Mendelsohn, chief investment strategist with Windham Financial, said that traders had to look to the charts for buy signals in the absence of any major news headlines.
"We're seeing a technical bounce just above the 200-day moving average, which is very normal," said Mendelsohn. "We're correcting some of Friday's excess decline, and I think that's all it is. Also, there's going to be a lot of volatility we'll see leading up to
this week's jobs report. Now, the critical thing is that we see more buying instead of dropping down further."
Larry Wachtel, senior market analyst with Wachovia Securities, argued that it wouldn't be easy to rally back following last week's plunge.
"The problems that dragged us down are still there, so we could definitely be in for another clobbering," said Wachtel. "We've been beaten down and we could use a bounce, but we had a declarative slide."
Wachtel was concerned about one subsector in particular. "The major financial stocks are the worst performers, and that has to stop," he said. "We can't have a market rallying when the major financials are getting killed."
The financial sector did in fact rebound, aiding the rally. After both fell by more than 5% over the previous five sessions, the KBW Bank Index was higher by 1.6% and the Nasdaq Financial Index rose 1.3%.
Many other groups also recovered and closed up. Among the winners, the Philadelphia Gold & Silver Index added 3.3%, the Amex Oil Index was higher by 1.7%, and the Philadelphia Semiconductor Sector Index also rose 1.7%.
About 4.07 billion shares changed hands on the
New York Stock Exchange
, as advancers topped decliners by a 5-to-3 margin. Volume on the Nasdaq reached 2.36 billion shares, with winners outpacing losers 9 to 7.
The new week brought another round of earnings reports, including results from Dow component
, whose second-quarter sales and profits were in line with estimates. The company also said it will acquire
. Verizon shed 49 cents, or 1.2%, to $41.51.
reaffirmed its full-year forecast and offered a third-quarter projection that should top analysts' current estimates. The stock closed up 27 cents, or 0.4%, at $65.08.
said its second-quarter sales slid 15%, but the company still had positive earnings, reversing the loss in the year-earlier period. Shares of RadioShack tumbled $3.25, or 11.3%, to $25.55.
On the merger front,
said it plans to sell its Bobcat, utility equipment and attachments businesses for $4.9 billion. Ingersoll-Rand jumped $3.63, or 7.5%, to $51.77.
Meanwhile, a report in
The Wall Street Journal
would be "highly unlikely" to proceed with its $5 billion bid for
at the current shareholder vote tally. Dow Jones' controlling shareholders face a 5 p.m. EDT deadline to turn in votes for the deal.
Shares of Dow Jones slid 5.3% to end the day at $51.56, while News Corp. gained 0.8% to $22.84.
lost ground after the stock received a negative mention in
this past weekend, owing to the giant run-up in price in recent months. Amazon fell by $1.34, or 1.6%, to close at $82.70.
Among the research calls, AG Edwards upgraded
to buy from hold, and JMP Securities raised
to market perform from market underperform. Exxon climbed 0.5% at $86.01, and Motorola tacked on 0.1% at $16.97.
In the absence of any economic data, Treasury prices lost ground. The 10-year note was down 10/32 in price, yielding 4.80%, and the 30-year bond lost 18/32, yielding 4.97%.
After finishing a penny shy of its record close during the last session, the September crude contract gave back 19 cents to $76.83 a barrel. Gasoline prices were off by a penny at $2.08 a gallon.
The earnings parade will continue before Tuesday's open, when such names as
are due to report.
Whole Foods Market
will be out with earnings results later in the day.