The Dow Jones industrial average rose 1.69 points, or 0.02%, to 10,314.76. The broader Standard & Poor's 500 index was up 1.9 points, or 0.17%, to 1,125.82. The Nasdaq composite index gained 16.07 points, or 0.85%, to 1,910.38, driven by strength in chip, telecom equipment, and Internet stocks.
The Nasdaq fared better than the broader market on sentiment that the worst is over for many tech and telecom groups, and that valuations are attractive, says Standard & Poor's MarketScope.
Tuesday will bring two economic reports. Retail sales for August are expected to rise 0.1% or 0.2%, while ex-auto sales should increase 0.2%. The disappointing level of vehicle sales and unexpected weakness in chain store sales suggest that strength in sales will be limited, says Action Economics.
The second-quarter current account deficit is forecast to widen to a new record of $166.3 billion after setting a record deficit of $144.9 billion in the first quarter, says Action Economics.
Companies on Tuesday's earnings calendar include Kroger (KR
), Pier 1 Imports (PIR
), Oracle (ORCL
), and Vivendi Universal (V
Among the stocks in the news Monday, US Airways Group (UAIR
) filed for Chapter 11 bankrupty protection for the second time in two years. The airline was unable to get another round of concessions from its workers, and was facing violation of cash balance and other financial covenants. The shares plummeted, dragging down other airline issues in its wake.
Earnings warning season is underway, kicked off Friday by Alcoa (AA
), which lowered its outlook for the third quarter. On Monday, Broadcom (BRCM
) was higher even though the company projected sequentially flat September quarter revenue, vs. its previous third-quarter guidance of up 5% to 6%. It cited requests from certain customers that delivery of some orders be delayed due to excess inventory in their supply chain.
Shares of prepared-food giant Campbell Soup (CPB
) moved lower after it posted fiscal fourth-quarter earnings before special items of 17 cents per share, vs. 18 cents one year earlier, a penny below analysts' estimates.
In merger news, a group of investors led by Sony (SNE
) raised its offer for Metro-Goldwyn-Mayer (MGM
) to close to $5 billion in a last-ditch effort to win a bidding war for the movie studio against Time Warner (TWX
), according to the Wall Street Journal.
Digitalnet Holdings (DNET
) agreed to be acquired by BAE Systems North America Inc. for $30.25 cash per share.
Treasuries ended higher in price, in a low-volume rally set in motion after another jump in the price of oil as Hurricane Ivan spun into the Gulf of Mexico and took aim at U.S. refineries along the coast, says Action Economics. The yield on the 10-year note settled at 4.15%.
European stock markets finished higher on Monday. London's Financial Times-Stock Exchange 100 index was up 13.5 points, or 0.3%, to 4,558.5. AstraZeneca was lower after a U.S. FDA advisory panel rejected the company's Exanta blood thinner. WPP was up a bit after agreeing to acquire Grey Global.
Germany's DAX index gained 67.28 points, or 1.73%, to 3,953.31. Bayer was higher after the company said it had formed a marketing partnership with U.S. competitor Schering-Plough. E.ON rose after a UBS analyst raised his recommendation on stock to "buy 1." Infineon Technologies gained after the company said it plans to boost business in China.
In Paris, the CAC 40 index rose 47.79 points, or 1.3%, to 3,725.4. Alcatel was higher after Goldman Sachs raised its earnings forecast for the company. Havas rose after losing the bid for Grey Global to WPP Group.
In Asia, the markets finished higher on Monday. Japan's Nikkei 225 index gained 169.88 points, or 1.53%, to 11,253.11, led by technology stocks. The world's largest maker of chip testing devices, Advantest, rose 4.9% while Sharp added 4.1%. Kyocera rose after it said it would launch a personal handphone system data communication device in China in the coming months.
In Hong Kong, the Hang Seng index rose 135.58 points, or 1.04%, to finish at 13,139.57. Properties and banking names led the gains.