Wall Street advances on earnings momentum

By Chuck Mikolajczak

(Reuters) - Wall Street advanced modestly on Monday, with the S&P on track for its seventh gain in eight sessions, as a better-than-expected start to corporate earnings season boosted investor confidence and overshadowed a drop in commodities.

The tech-heavy Nasdaq composite also continued its recent momentum, adding to its gains from last week and touching a record for the third straight day, as investor focus shifts to earnings from concerns surrounding Greece and China.

Gold prices plunged to their lowest in more than five years while copper prices hit their lowest in nearly two weeks. Oil prices fell too on signs of a growing glut in refined products, to pull the S&P energy index <.SPNY> down 1 percent.

The dollar index rose 0.13 percent to $97.99. It had earlier hit a three-month high due to expectations of a Federal Reserve rate hike this year.

"You've got an interesting dynamic in the S&P 500, so you put Greece in the rear-view mirror and then have the first week of earnings end with a better-than-expected style, and that brings you back up to the top end of the range, or at least close to it," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"But when you have commodity pressure, if you have energy down a full percentage point on the S&P today - that is going to be a tough hurdle to get over."

Tech earnings will continue to be in focus with IBM reporting after the close on Monday and other tech giants such as Apple , Yahoo and Microsoft due later this week.

Of the companies that have reported earnings so far, 70 percent have reported earnings above analyst expectations, above the 63 percent average beat rate since 1994. Earnings are expected to show a decline of 2.1 percent for the quarter, a modest improvement from the expected 3 percent fall on July 1.

However, 55 percent have topped revenue forecasts, below the 61 percent average beat rate since 2002. U.S. companies were expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of U.S. companies' overseas income.

The Dow Jones industrial average rose 36.24 points, or 0.2 percent, to 18,122.69, the S&P 500 gained 4.75 points, or 0.22 percent, to 2,131.39 and the Nasdaq Composite added 18.53 points, or 0.36 percent, to 5,228.67.

The S&P 500 was just shy of its most recent record intraday high 2,134.72 set on May 20.

Morgan Stanley touched a high of $41.04, its highest level in seven years, after the bank's profit beat expectations. However, it relinquished gains and was last down 0.5 percent at $40.01.

NYSE declining issues outnumbered advancing ones 1,956 to 1,062, for a 1.84-to-1 ratio on the downside; on the Nasdaq, 1,801 issues fell and 974 advanced for a 1.85-to-1 ratio favouring decliners.

The S&P 500 posted 43 new 52-week highs and 31 new lows; the Nasdaq Composite recorded 116 new highs and 122 new lows.

(Editing by Don Sebastian and Nick Zieminski)