Investors set aside their concerns about instability in Iraq Monday and sent stock prices solidly higher on expectations for a robust first-quarter earnings reporting season. All three major U.S. stock indexes regained the ground they lost last week.
Analysts said investors appear to have factored the increased fighting in Iraq and continued threat of terrorism into their overall investment decisions.
“As callous as it sounds, we’re now part of that situation where the world has terrorism at its doorstep, we’ll digest that and we’ll start trading on the fundamentals,” said Bill Groenveld, head trader for vFinance Investments. “We’re just getting back to business as usual.”
The Dow Jones industrial average finished the day up 73.53 points, or 0.7 percent, at 10,515.56, having lost 0.3 percent last week.
Broader stock indices also advanced.
The Standard & Poor’s 500-stock index rose 5.90 points, or 0.5 percent, to 1,145.22, while the Nasdaq composite index rose 12.60 points, or 0.6 percent, to 2,065.48. Both the S&P 500 index and the Nasdaq lost 0.2 percent last week.
Investors made bets ahead of the bulk of earnings reports, hoping corporate giants like Merrill Lynch & Co., Johnson & Johnson, Citigroup and IBM Corp., all releasing earnings this week, will have some significant upside. Their optimism was fed by upbeat reports last week from General Electric Co. and Yahoo! Inc.
“I’m kind of surprised we’re up this much given the situation in Iraq,” said Todd Leone, managing director of equity trading at SG Cowen Securities. "I think people looked at stocks like Yahoo!, which had a nice jump, and they’re trying to get ahead of earnings to take advantage of some of the upside coming up.”
Two media companies, Gannett Co. and The New York Times Co., announced earnings before the session began. Gannett saw a 10 percent hike in first-quarter profits, and earnings per share were in line with estimates. Gannett lost $1.20 to $89.22.
The New York Times Co. was down 34 cents at $46.73 after announcing profits that declined 15 percent year-over-year. However, the company beat Wall Street expectations by 2 cents per share.
Kimberly-Clark Corp., maker of consumer products such as Kleenex and Huggies diapers, slipped 23 cents to $63.57 as it announced earnings would be higher than previously estimated. The company was expected to report first-quarter earnings April 22.
Microsoft Corp. gained 13 cents to $25.61 as it announced a $400 million settlement with InterTrust Technologies Corp. over a long-standing patent dispute centered on digital rights management technology.
(MSNBC is a Microsoft-NBC joint venture.)
Chemical giant DuPont Co. said it will eliminate 3,500 jobs by year’s end in an effort to cut costs. DuPont, which rose 63 cents to $44.06, expects to take a one-time second quarter charge of approximately 17 cents to 19 cents per share to cover severance costs.
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where volume was light, a common occurrence after a holiday. The Russell 2000 index of smaller companies rose 1.77 points, or 0.3 percent, to 599.65.
Traders returned from a holiday weekend Monday, as many world markets were closed for Good Friday. Exchanges in London, Frankfurt and Paris remained closed for Easter Monday.
Japan’s Nikkei average finished Monday 1.2 percent higher.