Wall Street rallies on China stimulus ahead of tech earnings

Investors cautiously optimistic about earnings

Wall Street rose on Monday, reversing much of the previous session's sharp decline, as China's steps to stimulate its slowing economy and cautious optimism about US earnings lured investors into technology stocks.

In the second industry-wide cut in two months, China's central bank on Sunday reduced the amount of cash that banks must hold as reserves in a move to help spur lending and combat slowing growth.

A 2.5% rise in Apple led the US market higher, along with a 2.89% jump in IBM, which reports its March-quarter results after the bell. The Information Technology component of the S&P 500 was up 1.75%.

At 2:58 pm the Dow Jones industrial average rose 209.52 points, or 1.18%, to 18,035.82, the S&P 500 gained 18.84 points, or 0.91%, to 2,100.02 and the Nasdaq Composite added 59.90 points, or 1.21%, to 4,991.72.

Other corporations expected to report earnings this week include major technology names Facebook, Google, Qualcomm, Microsoft, and Amazon.com.

"I'm hoping companies will say 'OK, we've had a miserable first quarter but things are improving,'" said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia.

Nearly 76% of the S&P 500 components that have reported earnings above analyst expectations, topping the 70% average in the last four quarters. But just 47% beat on revenue, compared to the 58% average.

The quarterly results of US multinationals have been hurt by unusual strength in the dollar, which was up 0.44% against a basket of major currencies on Monday and has gained 8% so far in 2015.

Hasbro jumped 12% after the toymaker reported a surprise increase in revenue. Royal Caribbean fell 7.37% after it reported a fall in revenue, saying a strong dollar hurt spending on its cruise ships.

Advancing issues outnumbered declining ones on the NYSE by 2,115 to 864, for a 2.45-to-1 ratio on the upside; on the Nasdaq, 1,838 issues rose and 885 fell for a 2.08-to-1 ratio favouring advancers.

The S&P 500 was posting 2 new 52-week highs and 1 new low; the Nasdaq Composite was recording 37 new highs and 43 new lows.