The Dow Jones industrial average gained 82.95 points, or 0.87%, to 9,586.29. The broader Standard & Poor's 500 index was higher by 10.25 points, or 1%, to 1,031.64. The tech-heavy Nasdaq composite index was up 30.41 points, or 1.64%, to 1,888.65.
The hardware sector advanced after a market research firm upgraded worldwide PC shipment growth a few percentage points on better-than-expected second quarter shipments. Semiconductor equipment stocks were also strong on an analyst upgrade. Pharmaceutical, aluminum, communication equipment and managed healthcare shares were up while retailers were broadly lower.
Dow industrials component IBM (IBM
) started the week with an upgrade to outperform from neutral from Credit Suisse First Boston. The stock finished higher by 2.6%, challenging the top of a 17-month consolidation.
Biotech concern Regeneron Pharmaceuticals (REGN
) surged 32% on news that it had entered into a global agreement with Aventis (AVE
) under which the companies will jointly develop, and commercialize a vascular endothelial growth factor (VEGF) trap.
RF Micro Devices (RFMD
) finished up 16% after the wireless chipmaker raised its quarterly forecast for revenue, gross margin and earnings to exceed prior guidance. The company will announce its second quarter earnings on Oct. 21. Legg Mason reiterates its buy rating of the stock, and raises the company's target.
Printed circuit boards maker Merix (MERX
) gained 10% after RBC Capital upgraded the company to sector perform from underperform. CIBC World upgraded the stock to sector outperform from sector underperform.
Publisher Dow Jones (DJ
) says that its ad linage, or volume for its U.S. edition of the Wall Street Journal in August declined 10%, with year-to-date linage down 8.9%. However, the company notes that August is seasonally a low period, and that it's seeing a strong level of ad reservations for September. The stock added 1.5%.
In pharmaceuticals, generic drug maker Watson Pharmaceuticals (WPI
) has received final approval from the FDA for its generic version of painkiller Percocet. The stock gained 7.4%.
No major earnings or economic news are due Tuesday. September, however, begins a season of conferences. This week investment banks are holding investor meeting on financial services, healthcare and tech sectors.
Key economic updates will not be available until Friday, when reports on retail sales, University of Michigan's consumer sentiment index and producer prices are due. Economic releases this week include wholesale inventories and sales on Tuesday, and the trade report and weekly jobless claims on Thursday.
Treasuries were prodded higher by "fast money" flows and rumors of the whereabouts of Osama Bin Laden, but the buying soon evaporated and prices finished about where they began -- in the red, says economic research outfit MMS International. Treasuries were strong earlier after the U.S. government said it would sell less new debt this week than expected. The Treasury auctioned $16 billion in five-year notes and $13 billion in reopened 10-year notes. Auction results were good although they were helped by the slight reduction in size.
In data Tuesday, MMS expects consumer credit to rise $1.0 bln in July following a $0.4 bln dip in June. The drop in June credit was due solely to a drop in revolving credit, which was likely the consequence of consumers financing consumption via refinancing gains rather than with credit cards.
European stock markets finished higher on Monday. London's Financial Times-Stock Exchange 100 index gained 34.9 points, or 0.82%, to 4,292.10, as U.K. factory output grew in July at its fastest pace since last November. In Paris, the CAC 40 closed up by 16.97 points, or 0.50%, to 3,409.72. Germany's DAX index was higher by 29.80 points, or 0.83%, to 3,637.51.
Asian markets finished modestly higher. In Japan, the Nikkei 225 index gained 32.99 points, or 0.31%, to close at 10,683.76. "The Tokyo market rebounded to positive territory late morning, supported by recent improved outlook for the Japanese economy and corporate earnings," says MMS. Bank stocks performed well, with Sumitomo Mitsui Financial Group up 4.74%, and Mitsubishi Tokyo Financial Group up 2.91%. In high tech stocks, Nikon surged 5.83%, and Sony rose 5.0%.
In Hong Kong, the Hang Seng index lost 5.33 points, or 0.05% to close at 11,165.28.