Stocks Break Losing Streak - TheStreet

Stocks Break Losing Streak

Stocks ended a three-day losing streak Monday, even after disappointing existing-home sales. Apple reported earnings after the close that smashed estimates. Gregg Greenberg reviews the day in The Real Story.
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NEW YORK (

TheStreet

) -- Stocks broke a three-day losing streak to finish higher Monday, buoyed by advancing tech stocks and just before

Apple

(AAPL) - Get Report

reported a 33% year-over-year surge in Mac sales.

The

Dow Jones Industrial Average

advanced 24 points, or 0.2%, to 10,197. The

S&P 500

rose 5 points, or 0.5%, to 1097, and the

Nasdaq

went higher by 6 points, or 0.3%, to 2211.

A big week of Apple news began after the closing bell.

The tech bellwether beat estimates, posting

first-quarter earnings of $3.67 a share, or $3.38 billion. The results arrived amid new accounting standards for recognition of iPhone sales. Revenue climbed to $15.7 billion. Later in the week, Apple is expected to unveil its much rumored tablet computer. After trading was briefly halted, shares swung wildly in extended hours.

>>Value Stocks to Consider as Market Drops

The chip sector highlighted the broad uptick in stocks Monday, as exemplified by a 1.4% rise in the Philadelphia Semiconductor Index.

Intel

(INTC) - Get Report

led percentage gainers on the Dow, improving by 2.3%, while

Advanced Micro Devices

(AMD) - Get Report

added 2.7%.

Late Monday,

Texas Instruments

(TXN) - Get Report

also beat forecasts by 3 cents in reporting earnings of 52 cents a share, while sales arrived largely in line. The stock fell 1.8% in extended-hours trading after closing higher at $23.69.

Elsewhere,

VMware

(VMW) - Get Report

shares rocketed over 17% in extended hours after its own quarterly results and guidance topped expectations.

Shares of

Microsoft

(MSFT) - Get Report

and

Hewlett-Packard

(HPQ) - Get Report

also improved 1.1% and 1.6%, respectively, during the regular session.

American Express

(AXP) - Get Report

was the biggest decliner on the major blue-chip average, continuing a slide that began Friday.

Kraft Foods

(KFT)

followed close behind after Italy's

Ferraro

ruled out a bid for

Cadbury

(CBY)

, leaving Kraft's offer uncontested.

In anticipation of Wednesday's State of the Union address, the president held a meeting of his Middle Class Task Force Monday morning. The White House previewed a series of proposals, ranging from a near doubling of the child tax credit for families making under $85,000 to the expansion of tax credits to match retirement savings.

"We are fighting every single day to put Americans back to work, create good jobs, and strengthen our economy for the long term," the president said in a statement. "The additional steps laid out today focus on easing the burdens on middle class families who are struggling in this economy, and providing the help they need to get ahead."

Markets fell off morning highs but quickly rebounded after the National Association of Realtors said

existing-home sales

for December fell at a swifter-than-expected pace of 16.7%, to a seasonally adjusted annual rate of 5.45 million. Economists had expected sales to come in at 6 million, or a decline of 8.3%, from November's rate of 6.54 million, helped by a tax credit for homebuyers.

Markets may also be buoyed by signs that

Ben Bernanke appears closer to nabbing a second run at the head of the

Federal Reserve

, as senators voiced their support for the embattled chairman, whose term ends Jan. 31.

Doug Roberts, chief investment strategist at ChannelCapitalResearch.com and author of

Follow the Fed to Investment Success

, said last week's weakness was triggered by China, saying it was going to tighten up and was furthered by concerns in Europe, fears about U.S. banks, the loss of the Democrats' Senate seat and feelings that President Obama would shift his agenda.

"The bounce

Monday could be attributed to a variety of things. Basically, once things start to go down that much, it's like holding a beach ball underwater -- eventually it's going to pop up," Roberts said. "While the strength is partially due to Ben Bernanke looking like he's going to be reconfirmed, it's also because there doesn't seem to be as much bad news out. People appear to be reassessing and thinking that maybe things won't be as bad as previously feared."

In earnings news, shares of

AK Steel

(AKS) - Get Report

surged 5.4% as the company reported better-than-expected fourth-quarter results and said it expects stronger pricing in 2010.

Halliburton

(HAL) - Get Report

reported a drop in fourth-quarter earnings but topped Wall Street's consensus estimate, as did industrial manufacturer

Eaton

(ETN) - Get Report

. Halliburton shares slipped 0.3%, while Eaton's stock dipped 2%.

Ericsson

(ERIC) - Get Report

said fourth-quarter earnings plummeted 82% as consumers reduced spending, and

Philips

(PHG) - Get Report

swung to a fourth-quarter profit. Ericsson's stock fell 0.3% while shares of Philips rose 7%.

Elsewhere,

General Motors

said acting CEO Ed Whitacre will become the automaker's permanent CEO, ending the company's months-long search to fill the role. The company also announced it would fully repay its government bailout loans by June.

Crude oil for March delivery traded 72 cents higher to settle at $75.26 a barrel. The most actively traded February gold contract settled at $1,095.70 an ounce after adding $6.

The benchmark 10-year Treasury note shed 8/32, lifting the yield to 3.632%.

The U.S. dollar fell against a basket of currencies. with the dollar index off by 0.1%.

Overseas, Hong Kong's Hang Seng was down 0.6%, and Japan's Nikkei was lower by 0.7%. The FTSE in London traded 0.8% lower, and the DAX in Frankfurt fell 1.1%.

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

.