Updated from 1:08 p.m. EDTStocks rose Monday as traders went long on the first, albeit holiday-shortened, day of the third quarter. The Dow Jones Industrial Average gained 77.80 points, or 0.7%, to 11,228.02, and the S&P 500 added 9.98 points, or 0.79%, to 1280.18. The Nasdaq Composite was up 18.34 points, or 0.84%, at 2190.43. The 10-year Treasury fell 3/32 in price to yield 5.15%, and the dollar was higher against the yen and euro. Trading in U.S. stock markets ended early at 1 p.m. EDT Monday, and markets will be closed Tuesday for the July Fourth holiday. The New York Mercantile Exchange, where commodities such as crude and gold trade, was closed. Ken Tower, chief market strategist with CyberTrader, suggested earlier that it might be difficult to draw conclusions about the session's move because many traders could have taken the day off. "Price action is most revealing when all market participants are involved," he said. "Days with less than full participation are more prone to produce phony signals." About 767 million shares changed hands on the New York Stock Exchange, with advancers beating decliners by a 3-to-1 margin. Volume on the Nasdaq was 754 million shares, and winners edged losers 4 to 3. "There's not much we can take away from today, as moves were accentuated by an absence of traders," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "We'll just have to take this for what it's worth. A higher day is still a welcomed positive." The rise in stocks came despite Wal-Mart ( WMT) reporting a lackluster sales performance for June. The world's biggest retailer said on Saturday that same-store sales rose 1.2% for the month, toward the low end of its 1% to 3% growth target. Wal-Mart lost 60 cents, or 1.3%, to finish at $47.57. "The second half of the year will get off to a slow start with low volume ahead of the holiday," said Peter Cardillo, chief market strategist with S.W. Bach & Co. "The major focus this week will be economic data, including the jobs report for June on Friday. We should be in a tight range until all of this is out of the way." The day's main economic report was the Institute for Supply Management's factory index for June, which fell slightly to a reading of 53.8. Economists expected a reading of 55 for last month, up from 54.4 in May. To view Kara Wetzel's video take on today's market,
Separately, the Commerce Department said construction spending unexpectedly fell 0.4% for May. Economists expected an increase of 0.2% after spending was down 0.2% in April. Stocks finished moderately lower on Friday as investors consolidated positions following Thursday's Fed-ignited rally. For the second quarter, the Dow rose 0.4%, while the S&P 500 fell 1.9% and the Nasdaq lost 7.1%. The Dow's second-quarter outperformance reflected strength in General Motors ( GM). The company continued to be in the news Monday as Nissan's board authorized exploratory discussions toward bringing the No. 1 U.S. automaker into its alliance with Renault. The proposal is reportedly backed by Kirk Kerkorian, owner of 10% of GM's shares. On Monday, Banc of America Securities upgraded GM to neutral from sell, raising its stock-price target to $30 from $15. Still, shares of GM fell 38 cents, or 1.3%, to $29.41. GM rivals Ford ( F) and DaimlerChrysler ( DCX) reported auto-sales results for June. Ford posted a 6.9% decline for the month, as a 7.1% increase in car sales was offset by a 14.4% drop in truck sales. DaimlerChrysler had a 13% decline in auto sales. GM is expected to post its sales figures later. Elsewhere, Jefferies upgraded telecom company Nortel ( NT) to buy from hold, citing valuation. The firm also upped Nortel's stock-price target to $3 from $2.60. The stock was higher by 7 cents, or 3.1%, to close at $2.31. CBOT Holdings ( BOT), the parent company of the Chicago Board of Trade, said average daily trades totaled 3.3 million contracts in the second quarter, up 14% from a year ago and a record for the period. CBOT Holdings dipped 16 cents, or 0.1%, to $119.43. Michaels Stores ( MIK) said after the close Friday that it has agreed to a $6 billion buyout offer from two private equity firms. Bain Capital and Blackstone Group will pay $44 a share for the arts and crafts retailer. Shares of Michaels finished up 97 cents, or 2.4%, to $42.21. The exchange-traded fund iShares MSCI Mexico ( EWW) traded up 5.8%, even as the future of Mexico's top legislative post was unclear. A winner couldn't be determined in the country's tight presidential election between Felipe Calderon and Andres Manuel Lopez Obrador. Meanwhile, Mexico's Bolsa index added 4.2%.
Calderon, the politician viewed as more friendly toward the U.S. and business interests, was said to have a slight lead over Lopez Obrador, a leftist candidate, according to a preliminary tally of the votes. By sector, the Philadelphia/KBW Bank Sector index, the Amex Airline Index, and Dow Jones Transportation Average were all higher by 0.9%. The S&P Retail index was one of few losing sectors, down 0.1%. Overseas markets were higher, with London's FTSE 100 up 0.9% to 5884 and Germany's Xetra DAX adding 0.5% to 5712. In Asia, Japan's Nikkei rose 0.4% overnight to 15,572, and Hong Kong's Hang Seng gained 0.4% to 16,327.