Updated from 4:07 p.m. EDT

Stocks ended near their highs for the year onday, as a solid quarterly report from

Motorola

(MOT)

had investors betting on a strong earnings season.

The

Dow Jones Industrial Average

rose 89 points, or 0.9%, to 9764.38. Earlier in the session, the Dow set a new 52-week high of 9783. The

Nasdaq

gained 18 points, or 1%, to 1933.53 after setting a new 52-week high of 1941 earlier. The

S&P 500

advanced 7 points, or 0.7%, to 1045.35, slightly below the 1049 high it reached earlier in the session.

"This is in keeping with strong earnings expectations," said Ozan Akcin, chief market strategist at Puglisi & Co. "This is one of the two peak weeks for the earnings season, and after solid results in the first and second quarters, we're expecting more of the same."

Akcin said only a major exogenous shock or extremely negative economic data could deter steady gains in stocks from here.

Jim Awad, market strategist at Awad Asset Management, agreed, with some reservations. "A change of course could still happen if corporations report fourth-quarter earnings and don't give strong forward-looking guidance, or if the economy starts to falter again."

But overall, Awad is still positive: "We've had a phenomenal year and fewer negative preannouncements for the third quarter than we expected, so the odds are it will be a good earnings season."

Volume was on the light side because of the Columbus Day holiday, and bond markets were closed. On the

New York Stock Exchange

, 1 billion shares traded hands, while 1.5 billion shares changed hands on the Nasdaq. Winners led losers by a margin of 2 to 1.

Motorola posted third-quarter operating earnings of 6 cents a share, 3 cents better than the analyst consensus, and said fourth-quarter earnings would beat estimates by a similar margin. The company, which published the results a day early following a Friday debt downgrade by Moody's, said revenue jumped 5% to $6.5 billion, about $200 million better than analysts had forecast. The company also gave investors optimistic guidance for the current quarter, saying revenue will be higher than analysts' estimates.

In its cell-phone division, Motorola said, sales rose 8% to $2.9 billion, while orders jumped 44% to $3.7 billion. The company shipped 20.2 million phones, up about 19% from last year. Shares climbed 2 cents, or 0.2%, to $13.81.

Honeywell

(HON) - Get Report

was pushing the Dow higher after the company agreed to acquire surveillance camera maker

Silent Witness Enterprises

for about $64 million. Honeywell advanced $1.18, or 4.3%, to $28.68.

Also moving up on the Big Board was

FedEx

(FDX) - Get Report

, gaining $2.96, or 4.3%, to $71.52. Merrill Lynch upgraded the stock to buy from neutral, citing cost-cutting measures.

Back in the wireless arena,

Qualcomm

(QCOM) - Get Report

CEO Irwin Jacobs said he sees abnormally high handset inventories ahead of the holiday selling season, as well as solid revenue growth in the next fiscal year, according to a

Reuters

report. Shares rose 62 cents, or 1.4%, to $44.93.

Investors had their eye on a few key names, including chipmaker

Intel

(INTC) - Get Report

, which will post results on Tuesday. On Friday, Deutsche Bank upgraded the stock to buy from hold. Intel climbed 30 cents, or 1%, to $30.73.

Other notable results this week include

Merrill Lynch

(MER)

,

General Motors

(GM) - Get Report

and

IBM

(IBM) - Get Report

.

On a negative note,

WebMD

(HLTH)

warned that third-quarter revenue and profit will fall short of Wall Street projections. Shares of the medical Web site operator lost 90 cents, or 10%, to $8.06.

Companies in the S&P 500 are currently expected to average 16.2% profit growth in the quarter ended in September, according to Thomson First Call.

Among the day's top business news,

ImClone

(IMCL)

and

Bristol-Myers Squibb

(BMY) - Get Report

said late Friday that the Food and Drug Administration granted expedited review to their application for the cancer drug Erbitux. Imclone lost $3.38, or 8.1%, to $38.62 after gaining more than 6% in early trading. Bristol-Myers dropped 17 cents, or 0.7%, to $25.33.

Meanwhile,

Oracle

(ORCL) - Get Report

extended its hostile bid for

PeopleSoft

(PSFT)

for the fifth time. The software giant gave its rival until Dec. 31 to accept its $19.50-per-share offer. Oracle shed 6 cents, or 0.5%, to $12.27, while PeopleSoft gained 15 cents, or 0.7%, to $20.70.

In research action, Smith Barney downgraded

eBay

(EBAY) - Get Report

to sell from hold ahead of the online auctioneer's results this week. The firm is concerned with the company's motors unit, citing users' dissatisfaction with prices and the auction format. Shares lost $1.38, or 2.3%, to $59.08.

Analysts at US Bancorp Piper Jaffray raised fiscal-year 2004 estimates for

Applied Materials

(AMAT) - Get Report

on expectations of solid revenue and stronger margins. Shares rose 20 cents, or 1%, to $20.95.

Banc of America Securities downgraded chipmaker

Micron

(MU) - Get Report

to neutral from buy, saying the company is still facing dwindling prices amid ample supply. Micron fell 23 cents, or 1.8%, to $12.55.

Overseas markets were higher, with London's FTSE 100 up 1.2% at 4362 and Germany's Xetra DAX up 1.9% at 3538. In Asia, Hong Kong's Hang Seng rose 0.2% to 11,961. Japan's markets were closed for a holiday.

The dollar was posting its biggest gain against the euro in a month, but was losing some strength against the yen. The 10-year note closed Friday at 99 31/32, a gain of 4/32, with the yield falling to 4.25%. Crude oil futures were higher in London.

On Friday, the Dow closed down 5 points at 9675, while the Nasdaq finished up 3 points at 1915. The S&P 500 was almost flat at 1038.