NEW YORK ( TheStreet) -- Stocks traded in tight range Monday, but managed to eke out marginal gains as investors took a wait-and-see approach ahead of an earnings season that could disappoint if corporate guidance is conservative.

But after the closing bell, Alcoa ( AA) kicked off the earnings season, raising its global aluminum consumption forecast and beating top and bottom-line estimate for the second quarter. The materials firm reported earnings of 13 cents a share on $5.2 billion in revenue.

The Dow Jones Industrial Average gained 18 points, or 0.2%, at 10,216. The S&P 500 improved nearly 1 point, or 0.1%, to 1079, while the Nasdaq advanced 2 points, or 0.1%, at 2198.

UBS analysts are expecting this earnings season to bring "very weak" guidance, which is likely to weigh heavily on markets since investors seeking clarity on global growth prospects will be paying particularly close attention to corporate outlooks.

"At current valuations, we believe that the market is (incorrectly) pricing in a double-dip recession. Management comments will be critical in shaping this view," said UBS strategist Jonathan Golub in a recent research note, adding that negative guidance could overshadow solid results.

"Earnings growth most likely peaked in the first quarter of 2010. However, we believe that companies will once again handily beat consensus expectations, although the magnitude of beats will not be as large as in recent quarters," Golub said.

Overseas Monday, Hong Kong's Hang Seng rose 0.4% and Japan's Nikkei dipped 0.4%. The FTSE in London added 0.7%, and the DAX in Frankfurt inched 0.2% higher.

The Economy

With no macroeconomic releases scheduled for Monday's trading session, investors will likely shift their focus to earnings season, which kicks off with Alcoa's results after the close of trading. Wall Street is anticipating a profit of 12 cents a share.

Company News

Shares across the basic materials and capital goods sectors put the most pressure on the market with United Technologies ( UTX) showing the weakest performance on the Dow, followed by DuPont ( DD), Caterpillar ( CAT) and Alcoa.

Meanwhile, the tech sector finished higher with Microsoft ( MSFT) and Intel ( INTC) grabbing the best gains on the Dow.

Shares of Apple ( AAPL) lost 1% after Consumer Reports said it couldn't recommend the iPhone 4 on account of a problem with the reception.

Johnson & Johnson ( JNJ) said it will acquire Micrus Endovascular ( MEND), a global maker of minimally invasive devices for the treatment of stroke, in a cash-for-stock deal that values each Micrus share at $23.40, representing a 6% premium to the stock's Friday closing price of $22.19.

BP ( BP) is in talks with Apache ( APA) regarding the possible sale of roughly $18 billion in assets, including a stake in Alaska's Prudhoe Bay field, according to The Wall Street Journal's Web site.

The Shaw Group ( SHAW) reported a third-quarter adjusted profit of 57 cents a share, exceeding analysts' estimates by 3 cents. The company also reaffirmed its year-end guidance for earnings in the range of $2.10 to $2.20 a share.

Aon ( AON) agreed to buy Hewitt Associates ( HEW) for $50 a share, or $4.9 billion in cash and stock.

Blackstone ( BX) is taking over the management of a portfolio of Asian real estate investments from Bank of America Merrill Lynch ( BAC).

SanDisk ( SNDK) also closed nearly 7% higher after receiving an upgrade at UBS.

Also after the bell, transport sector bellwether CSX ( CSX) topped second-quarter profit and revenue estimates, as earnings from continuing operations landed at $1.07 a share.

Commodities and the Dollar

The August crude oil contract declined by $1.14, to settle at $74.95 a barrel.

Elsewhere in commodity markets, the August gold contract traded $11.10 lower to settle at $1,198.70 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.4%.


The benchmark 10-year Treasury was up 1/32, lowering the yield to 3.056%.

The two-year note was down 1/32, lifting the yield to 0.645%. The 30-year bond fell 5/32, boosting the yield to 4.048%.

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

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