Dow Gains; Nasdaq Trails; IBM Beats

Before finishing mostly higher, stocks moved above and below the flat line Monday, with the SEC's scrutiny of Goldman Sachs clouding the session.
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NEW YORK (

TheStreet

) -- Most stocks finished higher after moving above and below the flat line Monday, though tech stocks lagged before

IBM's

(IBM) - Get Report

late-afternoon earnings release, which beat the Street.

Investors also digested the

Securities and Exchange Commission's

fraud charges against

Goldman Sachs

(GS) - Get Report

and

Citigroup's

(C) - Get Report

surprise earnings beat.

The

Dow Jones Industrial Average

added 73 points, or 0.7%, to 11,092, near its high of the session. The

S&P 500

gained 5 points, or 0.5%, to 1198, though the

Nasdaq

shed 1 point, or 0.1%, to 2480.

After the closing bell, IBM said it earned $1.97 a share on $22.9 billion in revenue in the first quarter, topping estimates calling for a profit of $1.93 a share and $22.75 billion in revenue, according to Thomson Reuters. IBM

raised its full-year profit guidance in the release, though margins fell just short of Street expectations. Shares added 1.2% to finish at $132.23 during the regular session, but were sliding in after-hours trading.

"We expect another solid quarter driven by improving IT demand trends -- positive results from

Accenture

(ACN) - Get Report

,

Oracle

(ORCL) - Get Report

and

Intel

(INTC) - Get Report

bode well for IBM -- with our above-consensus earnings per share estimates supported by IBM's continued focus on ongoing productivity initiatives (such as workforce rebalancing and process improvements) that should lend support to margins," said UBS analyst Maynard Um before the earnings announcement. UBS estimates called for a profit of $1.99 a share and sales of $22.6 billion.

Before turning mostly higher by the closing bell, the major market averages swung between positive and negative for much of the day as investors remained concerned about the fallout from Goldman's legal headaches.

"There's a lack of certainty with the SEC. Is it just Goldman, or are other banks going to be targeted," said Quincy Krosby, chief market strategist at Prudential Financial, before the closing bell, who also described the market's reaction to the news as "pretty mild."

But in the late afternoon, the banking sector broadly pulled back into positive territory and helped lift the indices, as the KBW Bank index gained 1% on the day. After shedding nearly 13% on Friday, shares for Goldman Sachs, in particular, finished 1.6%, or $2.62 higher, at $163.32 today after a

Bloomberg News

report said the SEC blessed the enforcement charges with a politically split 3-2 vote. The stock advance also comes ahead of the firm's

highly anticipated earnings release and conference call Tuesday morning. Goldman general counsel Greg Palm is expected to be on the call to answer questions about the SEC's civil complaint.

Though Citigroup added 7% on the day, some other financial names finished marginally lower.

Bank of America

(BAC) - Get Report

fell 0.1% and

JPMorgan Chase

(JPM) - Get Report

traded 0.4% lower.

Overseas, the Goldman Sachs charges weighed on

global shares. Hong Kong's Hang Seng lost 2.1%, and Japan's Nikkei shed 1.7%. The FTSE in London lost 0.3%, as did the DAX in Frankfurt.

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The Economy

The Conference Board's Leading Indicators Index showed stronger-than-expected March growth of 1.4%, compared with February's upwardly revised uptick of 0.4%. Economists had been forecasting a March increase of 1%. The board initially reported February gains of 0.1%.

"The largest positive contributions to the Leading Index came from the spread between 10-year Treasury bonds and the fed funds rate, the average workweek, the index of supplier deliveries, and stock market performance. Increasing residential building permits also added to the Leading Index," said Stuart Hoffman, chief economist at PNC Financial.

"The push from some of the stronger components of the Leading Index is likely not sustainable and we expect to see smaller gains in the Leading Index in the months ahead," he added. Hoffman also said a second consecutive month of gains to the Leading, Coincident and Lagging Indexes signals "that the U.S. economy is transitioning toward an expansion phase."

With no other economic releases scheduled, the market's attention will likely remain fixed on the financial sector as the

SEC investigates whether mortgage deals set up by other big Wall Street firms may have misled investors.

The White House said President Obama will travel to New York on Thursday to discuss

Wall Street reform. Several market watchers have questioned the timing of the Goldman Sachs allegations, suggesting the administration may be using the case to drum up support for a financial reform bill.

Goldman Sachs CEO Lloyd Blankfein

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Company News

Dow components

Coca-Cola

(KO) - Get Report

and

Johnson & Johnson

(JNJ) - Get Report

, along with tech behemoths

Apple

(AAPL) - Get Report

and

Yahoo!

(YHOO)

, are expected to join Goldman Sachs in reporting earnings Tuesday.

Citigroup

(C) - Get Report

shares gained 32 cents, or 7%, to $4.88, making it the biggest winner on the S&P, after the bank posted a surprise profit. Citigroup cited improving revenue, lower credit costs and tighter expense controls.

M&T Bank

(MTB) - Get Report

surpassed analysts' estimates with a first-quarter profit of $1.15 a share. Its stock shed 15 cents, or 0.2%, to $84.10.

Halliburton

(HAL) - Get Report

reported a better-than-expected adjusted profit of 28 cents and sales that fell 3.7% year over year but met analysts' estimates. Shares fell 0.2%, to $31.57.

Hasbro

(HAS) - Get Report

also beat analysts' earnings projections by 10 cents and said sales rose 8.2%, to $672.4 million, which was better than expected. The stock improved 2.7%, to $40.91.

Shares of

Arch Coal

(ACI) - Get Report

closed 0.3% higher after the company missed estimates for a profit of 8 cents a share by a nickel and reported sales that missed expectations. Year-end earnings guidance, however, was much better than expected at a range of $1 to $1.40 a share. Analysts have been projecting a full-year profit of 89 cents a share.

Shares of

Eli Lilly

(LLY) - Get Report

traded 0.1% higher after the pharmaceutical company reported a first-quarter profit that beat analysts' expectations. Sales were slightly lower than expected.

Newmont Mining

(NEM) - Get Report

is reportedly in the early stages of discussions with advisors to take over Australia's

Lihir Gold

(LIHR)

, according to

Reuters

.

Toyota

(TM) - Get Report

agreed to pay a $16.4 million fine to U.S. regulators related to its failure to report an accelerator pedal safety issue in a timely fashion. The fine is the largest that the U.S. Department of Transportation has ever imposed on an automaker. Toyota declined by 31 cents, or 0.4%, to $79.06.

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Commodities and the Dollar

The most actively traded June crude oil contract went $1.54 lower to settle at $83.13 a barrel. The June

gold contract, meanwhile, shed $1.10 to trade at $1,135.80 an ounce.

The

dollar was trading higher against a basket of currencies with the

dollar index up by 0.2%.

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>>The Economy

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>>Commodities and the Dollar

>>Treasuries

Treasuries

The benchmark 10-year Treasury weakened 8/32, lifting the yield to 3.799%.

The two-year note fell 2/32, raising the yield to 0.984%. The 30-year bond weakened 10/32, strengthening the yield to 4.692%.

--Written by Melinda Peer and Sung Moss in New York

.

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