July 8, 2013 at 4:06 PM ET
Stocks rose for the third-straight session Monday, as investors geared up for the start of the second quarter earnings season, but technology shares declined, weighing on the Nasdaq.
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The Dow Jones Industrial Average finished 88 points higher, at 15,224.69 led by Wal-Mart and UnitedHealth. The blue-chip index was within 200 points of reaching its record close of 15,409.39.
The S&P 500 was also higher, while the Nasdaq eked out a small gain. The Russell 2000 finished at a fresh all-time high after closing above 1,000 for the first time last Friday. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 15.
Most key S&P sectors closed in positive territory, led by utilities and consumer staples, while telecoms and techs lagged.
Aluminum producer Alcoa was slated to post second-quarter earnings numbers after the closing bell.
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So far, earnings pre-announcements have been very negative. As of last Friday, the ratio of negative-to-positive corporate comments stood at 6.5 to 1, according to Reuters, more than 2.5 times the normal pace and the most negative reading since 2001.
"We're a little more optimistic than the consensus right now, but any way you slice it, it's not going to be a good earnings season," said BTIG chief global strategist Daniel Greenhaus."Guidance is particularly important since you're going to have much less Federal Reserve accommodation."
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The CNBC Fed Survey, taken right after Friday's jobs report, showed that on average, analysts now forecast the Fed will start scaling back its asset purchasing program in November. An earlier survey, taken a little over two weeks ago, showed the average forecast was for December.
Meanwhile, worries that Friday's upbeat U.S. jobs report could lead the Fed to unwind stimulus measures later this year weighed on Chinese stocks on Monday. The Shanghai Composite fell 2.4 percent to a one-week low, also hit by the news that Beijing will no longer extend credit to sectors that struggle with overcapacity.
"Chinese growth is once again being called into question... the market is thinking longer term and how a reduction in credit growth north of $100 billion will impact the economy," said Chris Weston, chief market strategist at IG, in a research note.
On the economic front, consumer credit increased in May by $19.6 billion to $2.8 trillion, the most in a year, according to the Federal Reserve. Economists polled by Reuters had expected consumer credit to rise $12.5 billion.
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