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(Updated from 9:46 a.m. EDT)

Investors who brushed off bad news about the economy on Friday are trying to build on those gains today.

Stocks jumped Friday after a worse-than-expected report about the job market renewed hope the

Federal Reserve will continue to be aggressive about cutting interest rates. The monetary policy body next meets on May 15.

This morning, the

S&P 500 slipped and then turned higher. It was lately up 1 to 1268. The

Dow was adding 28 to 10,979. And the

Nasdaq Composite Index was gaining 19 to 2210.


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was falling after the telecommunications equipment maker said over the weekend that its chief financial officer is leaving. The company, which has struggled with financial problems over the past year, said Deborah Hopkins is leaving "to pursue other opportunities now that Lucent's turnaround plan is well under way and the required financing to execute that plan is in place." Lucent was off 2.7% to $10.84. Its stock price has about doubled since hitting a 52-week low of $5.50, but it is still well off its high of $62.97.

Energy companies continue to grab headlines. This morning, refiner

Valero Energy

(VLO) - Get Free Report

said it agreed to buy rival

Ultramar Diamond Shamrock


for about $4 billion in cash and stock, plus the assumption of about $2 billion of debt. The deal creates the second largest refiner.



was jumping after it said

Dimension Data


offered to buy the Internet consulting firm for $7.50 a share in cash.



last month said it would buy the company for $5.75 a share in cash. Proxicom was recently up 29% to $7.27.

European markets were trading higher, helped by strength in technology and telecommunication stocks. Asian markets rose as well, also helped by telecom.

As earnings season winds down and with some big economic reports behind it, the market is searching for catalysts that will drive trading action. Much discussion will likely focus on the upcoming Fed meeting and what size rate cut investors expect. Because the jobs report last Friday showed the

unemployment rate rose to 4.5% in April, there is greater expectation the Fed will cut rates another 50 basis points. It has already reduced short-term rates two percentage points since the beginning of the year.



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reports earnings tomorrow after the market closes. If its CEO, John Chambers, has positive comments about the company, that could help re-invigorate investors' views about the networking sector. The company last month warned of a sharp third-quarter earnings shortfall and set more than $3 billion in charges to restructure its business and write off unsold gear. It was up 4.1% to $20.38.

Last week, the Dow rose 1.3%, the S&P 500 gained 1.1% and the Nasdaq was up 5.6%. Stocks have been on the rise since early April, boosted in large part by hopes the economy is improving and corporate earnings news can't get much worse.

"I'm still a little bit concerned about valuations," said Larry Rice, chief investment officer at


, a privately held securities firm in New York. Rice said his strategy is to sell some of his current holdings to raise cash he can use during the market's next downturn.

The Dow is again within whisper zone of 11,000.'s

Justin Lahart recently took a look at how the most

consistent selling level over the last half year or so has been the 11,000 mark. Since the Dow fell through 11K back in September, it has neared the mark several times -- even risen above it on an intraday basis -- but never managed to stay above it through the close.