Updated from 4:08 p.m. EST
Stocks ended higher Monday, as news about progress with weapons inspections in Iraq and a brokerage's call for more aggressive stock investment sparked optimism.
Dow Jones Industrial Average rose 55 points, or 0.7%, to 7920.11, while the
Nasdaq Composite rose 14 points, or 1.1%, to 1296. The
rose 6 points, or 0.8%, to 835.97.
An early report out of Iraq said U.N. weapons inspectors are "seeing the beginning or a change of heart" on the part of Saddam Hussein's government, although the U.S. dismissed the remarks as too little, too late.
was quoting the U.N.'s Mohamed ElBaradei after two days of talks in Baghdad. Just around midday, a U.N. envoy said Iraq had "unconditionally" accepted the use of U.N. U-2 surveillance planes.
Equities also got a boost from Banc of America, which raised its recommended equity exposure in a model portfolio to 75% from 70%. The company cited the potential for a war rally, relatively strong recent economic data and a better valuation picture.
While the recent Iraq news was encouraging, the thin volume on the day left traders unconvinced that the upside move was for real. "I don't think 'convincing' is a word I'd use for the rally," said Giri Cherukuri, head trader at OakBrook Investments. "This seems to be our first set of slightly positive news on Iraq, but until we see clearer resolution I don't see the market up long term. Ultimately, it's a minor bit of news, nothing major."
Among individual stocks,
said sales were slightly worse than expected last week, but it stood by its February same-store sales estimates of 2% to 4% growth. Shares gained 0.5% to $47.02 on the news.
Federated Department Stores
told investors that it was not on track to make February same-store sales goals. The retailer now says February sales will slip 4% to 5% below year-ago levels and warned about March and April, too. Shares gained 0.3% to $23.98.
The market also reacted to a report that
plans a $10 billion bid to buy the DirecTV satellite unit from
. SBC's interest in the pay-television provider puts the company in competition with Rupert Murdoch's
. General Motors' class H shares rose 4.6% to $10.20.
rose 5.1% to $17.07, after Merrill Lynch upgraded the company's shares to buy from neutral. The brokerage told investors that the company has strong fundamental growth and a potential business catalyst with its high-speed data offerings.
announced fourth-quarter earnings of 55 cents a share, topping analyst estimates by a penny on a 25% year-over-year revenue increase. But the hotelier warned that business going forward would not be as strong, with first-quarter and fiscal 2003 earnings coming in below current estimates. Shares gained 4.1% to $30.55, despite the news.
A possible deal in which
would sell its brokerage operations to
appears to be on track, according to a report in
The New York Times
. Prudential dipped 0.7% to $30.40, while Wachovia rose 1.2% to $34.99.
In other merger news,
, a drugmaker specializing in heart treatments, and blue-chip
Johnson & Johnson
formally announced their plans to merge. As reported on Friday, J&J will buy Scios for $45 a share, or $2.4 billion. Scios shares, which are up 32% over the last two sessions, added another 4.1% to $43.92. J&J shares rose 0.4% to $52.04.
shares gained 0.8% to $38.01 after the pharmaceutical company was deemed not responsible by a New Mexico jury for heart damage suffered by patients who took its Redux diet drug.
was a notable winner, gaining 17% to $10.99, after Thomas Weisel Partners upgraded the company to buy from market perform, based on its belief that better days are ahead for its beleaguered Erbitux drug.
On the flip side,
dropped 1.1% to $36.94, after announcing that Phase III trials of its prostate cancer treatment didn't meet its primary endpoint, which means that the testing will be stopped.
rose 2.8% to $18.40 after the company said five of its hospital units had completed a settlement with the government that was originally announced last May. The investigation concerned improper Medicare-related billing and had been weighing down company shares.
gained 4.3% to $50.49, after the company announced fourth-quarter earnings of 38 cents a share, a nickel better than Wall Street consensus on a 21.8% year-over-year revenue increase. Going forward, the company sees first-quarter revenue of $82 million, $1 million better than current estimates.
rose 4.2% to $3.20 after unveiling its new line of Blade servers in San Francisco, designed to go head-to-head with
rose 4.7% to $19.48 after a bullish article in
this weekend suggested the homebuilder's book value may be understated by as much as $3 a share. The news helped touch of another rally in homebuilders with
up 5.3% to $39.63, and
up 3.2% to $45.74.
Treasuries were lower, with the 10-year note losing 12/32 to yield 3.97%.
The Dow lost 189 points, or 2.4%, last week to close at 7864 -- its worst level since Oct. 12. The S&P 500 fell 26 points, or 3%, to 829, which leaves it at its worst level since Oct. 10. The Nasdaq lost 38 points, or 3%, last week to end at 1282. It's currently about 15% above its October low.