Wall St gains on earnings, tech helps Nasdaq

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stocks mostly rose on Monday, reversing earlier declines on strength in technology shares, while the energy and material sectors advanced on encouraging results.

Caterpillar Inc and Halliburton ranked among the S&P 500's biggest gainers after reporting results. Caterpillar was pressured early in the session after cutting its 2013 outlook, but rebounded after the company's chief executive said the mining sector had hit a bottom. Caterpillar's stock gained 2.6 percent to $82.55.

Halliburton , the oil field services company, rose 4.9 percent to $39.02 after the company posted quarterly results and said it is in talks to settle private claims against it in a trial.

 

The day's biggest gainers were in cyclical sectors, groups closely tied to the pace of economic growth. Last week, concerns about growth sparked steep declines in cyclical equities.

"Ultimately, we think cyclical names will lead the market higher, but in the short term, the decline could continue," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who said that cyclical stocks were oversold.

Microsoft Corp jumped 4.8 percent to $39 after CNBC reported that ValueAct Capital had taken a $2 billion stake in the company. Among other tech names, NetApp Inc climbed 2.7 percent to $33.88 while Apple Inc gained 1.3 percent to $395.44.

Netflix Inc was the S&P 500's top gainer, jumping 5.9 percent to $173.05 ahead of the company's results, which are scheduled for release after the closing bell.

While most S&P 500 companies that have reported earnings so far have topped analysts' expectations, a number of high-profile disappointments have raised questions about whether the market's steep run so far this year may be out of gas.

General Electric Co and McDonald's Corp both fell for a fourth straight day, extending declines from Friday, when both Dow components reported lackluster results. GE is down more than 8 percent over the past four sessions and on Monday, the stock fell 2.3 percent to $21.24. McDonald's lost 1 percent to $98.93 on Monday afternoon.

"Weak corporate outlooks have added to the growth fears that are making investors more risk averse," said Green, who helps oversee $7 billion.

The Dow Jones industrial average was down 22.30 points, or 0.15 percent, at 14,525.21. The Standard & Poor's 500 Index was up 2.58 points, or 0.17 percent, at 1,557.83. The Nasdaq Composite Index was up 16.19 points, or 0.50 percent, at 3,222.25.

Investors will be looking to the S&P 500's 50-day moving average of 1,544.74, which could serve as a level of market support. The index closed under that level for the first time this year on Thursday, but rebounded above it on Friday.

The S&P 500 posted its worst week of 2013 last week, largely on weak corporate earnings and signs of slowing growth from China, which led to a steep drop in commodity prices. Last week's decline fueled talk that the market's long anticipated pullback had arrived, though the S&P 500 remains up 9 percent for the year.

The CBOE Volatility Index jumped 24 percent last week, the biggest weekly gain for the so-called fear index this year.

By early afternoon, though, the VIX had shifted gears, slipping 0.7 percent to 14.86 - a reversal from its morning gains of more than 2 percent.

With 104 S&P 500 components having reported results through Friday, 67.3 percent of companies have topped profit expectations, according to Thomson Reuters data. Analysts expect earnings growth of 2.1 percent this quarter, up from expectations of 1.5 percent at the start of the month.

The National Association of Realtors said existing home sales slipped 0.6 percent last month to a seasonally adjusted annual rate of 4.92 million units. Economists polled by Reuters had expected home resales to rise to an annual rate of 5.01 million units.

Power-One Inc shares soared 56.9 percent to $6.34 in after ABB agreed to buy the company for about $1 billion.

CECO Environmental Corp agreed to buy Met-Pro Corp for $210 million, driving Met-Pro shares up 38.9 percent to $13.33. CECO fell 4.1 percent to $10.66.

(Editing by Jan Paschal)