Updated from 10:01 a.m. EDTStocks opened higher Monday as a ceasefire took hold in Iraq and traders got ready for the onslaught of earnings season. The Dow Jones Industrial Average rose 62 points, or 0.6%, to 10,504; the S&P 500 gained 6 points, or 0.5%, to 1145; and the Nasdaq Composite was up 13 points, or 0.6%, to 2066. The 10-year Treasury note traded down 12/32 in price to yield 4.24%, while the dollar was higher against the euro and roughly flat with the yen. "Last week, we had a little buyer's strike because of the three-day weekend and some of the headlines coming out of Iraq, and I think we're seeing a bounce back from that now," said Dave Briggs, head of equity trading at Federated. "Earnings and economic numbers should continue to be healthy, and I think seasonal factors will allow us to trade up in general over the next few months." "Bad news out of Iraq gives people pause," Briggs added, "It keeps us from getting that real bullish surge, but inevitably, if the market pulls back to an attractive level, I think people feel compelled to put money to work." The downtick in bonds followed a report Sunday in the San Francisco Chronicle in which Federal Reserve president Robert Parry was quoted saying that the fed funds rate would probably rise to 3.5% if inflation were to average 1% to 2%. Parry also estimated inflation will run about 1.5% for the rest of 2004, the newspaper reported. Most overseas markets were closed Monday for the Easter holiday. In Asia, Japan's Nikkei closed up 1.2% to 12,043. Truce talks continued Monday in Fallujah, where aid workers say more than 600 Iraqis have been killed in fighting over the past week. While the guns were largely silent, U.S. forces continued to maneuver around the city and have vowed to "resume offensive operations" if the negotiations bog down. More than 60 American soldiers have been killed in Iraq since April 4 and numerous civilians have been taken hostage, including seven Chinese nationals abducted in central Iraq Sunday evening. Officials continued to await word on the fate of American hostage Thomas Hamill, a contractor who insurgents had threatened to kill unless the Marines withdrew from Fallujah by early Sunday.
In corporate news, Entergy ( ETR) said first-quarter earnings will trail guidance due to lower earnings at its Entergy-Koch joint venture, while Microsoft ( MSFT) agreed to pay $440 million to settle a patent dispute with media-privacy company InterTrust. Gannett ( GCI) said first-quarter profits were in line with expectations, boosted by a stronger advertising market than a year earlier, when results were hurt by the war in Iraq. The nation's largest newspaper publisher earned $274.4 million, or $1 a share, up from $249.8 million, or 93 cents a share, in the same quarter last year. Lower first-quarter profits still beat expectations at New York Times ( NYT), as higher costs and expenses weighed on the media conglomerate. It earned $58.4 million, or 38 cents a share, down from last year's $68.8 million, or 45 cents a share. Analysts were expecting profits of 36 cents a share, according to Thomson One Analytics. No major economic releases were scheduled for Monday. Last Thursday, the Dow closed down 38.12 points, or 0.36%, to 10,442.03. The S&P 500 lost 1.20 points, or 0.11%, to 1139.33, while the Nasdaq gained 2.62 points, or 0.13%, to 2052.86. All of the major indices ended slightly lower for the four-day week, despite a healthy rally Monday and broad gains in the week before.