Nasdaq leads US stocks higher

IBM posts disappointing quarterly results

US stocks began the week on an optimistic, note on Monday, 20 October 2014 with gains in broader markets led by defensive sectors such as consumer staples and utilities. Monday's positive movement in the Dow industrial comes even as one of its major components, IBM, posted disappointing quarterly results, pushing shares of the tech giant lower and dragging down the broader index. Equity indices still finished the first session of the week near their highs with the Nasdaq Composite leading the way.

The Dow Jones Industrial Average closed 19.26 points, or 0.1%, higher at 16,399.67. The blue-chip index is down 1.1% since the start of the year. The Nasdaq Composite rose 57.64 points, or 1.4%, to 4,316.07, led by gains in biotech and internet stocks. The S&P 500 gained 17.25 points, or 0.9% to 1,904.01.

IBM earnings missed analysts' expectations, and shares skidded 7.1%, making it the biggest decliner among the Dow and the S&P 500 constituents. IBM also said it will sell its global semiconductor technology business to Globalfoundries, paying $1.5 billion in cash to the company over the next three years and will reflect a precash tax charge of $4.7 billion in its third-quarter results.

The market place was relatively calmer to start the new trading week, after a weekend that saw no significant events to further stoke trader and investor worries. Crude oil and the U.S. dollar index prices were near steady Monday. Crude oil is hovering near the two-year low scored last week, while the dollar index is not far below its recent four-year high. Traders and investors will continue to closely monitor these two key outside markets, which have a daily impact on many other markets.

In overnight news, reports said the central banks of Japan, China and the European Union have all began conducting some forms of monetary policy easing, albeit not aggressive moves. This comes at a time when the U.S. Federal Reserve is planning to wind down its own quantitative easing this month. There are growing notions the U.S. Fed may have to back-track on its quest to end its aggressive monetary policy stimulus. U.S. economic data released in the next few weeks will help determine which monetary policy path the Fed will take.

Precious metal prices ended the U.S. day session moderately higher on Monday, 20 October 2014 at Comex. Gold prices are hovering near a five-week high. The precious metal was boosted by more safe-haven demand and bargain hunting. Traders and investors are still a bit nervous following last week's volatility and uncertainty, which could return. Gold prices recovered from two days of losses on Monday on a combination of global economic uncertainties and overseas demand.

Gold for December delivery was up $5.70 to settle at $1,244.70 an ounce. December silver added 2 cents to $17.35 an ounce.

Crude-oil futures ticked lower on Monday, 20 October 2014 at Nymex. Traders remained unsure whether prices for the commodity have hit bottom and oversupply concerns continued.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in November declined 4 cents, or less than 0.1%, to settle at $82.71 a barrel. The U.S. oil benchmark lost 3.6% last week and has been down for three consecutive weeks.

Oil markets are looking for any indication from the Organization of the Petroleum Exporting Countries for cuts in oil supply levels. So far, the prevailing notion is that OPEC might not move to cut output and boost prices. The cartel meets at the end of November in Vienna.

Treasuries registered modest gains with the 10-yr yield slipping one basis point to 2.18%.

Today's participation was largely in-line with average as 723 million shares changed hands at the NYSE floor.

Investors did not receive any economic news today and tomorrow's data will be limited to the Existing Home Sales report for September (consensus 5.11 million), which will be released at 10:00 ET.

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