US STOCKS-Wall St higher on earnings optimism, Alcoa gains

Mon Apr 11, 2011 11:58am EDT

Related Topics

* Alcoa rises before start of earnings season

* Some profit gains may be priced into stocks

* NYSE Euronext snubs bid from Nasdaq/ICE

* Stocks up: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.2 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to midday, changes byline)

By Ryan Vlastelica

NEW YORK, April 11 (Reuters) - U.S. stocks rose on Monday as investors bet on a strong corporate earnings season, which Alcoa Inc (AA.N) unofficially launches after the market's close.

Profits for S&P 500 companies are seen rising 11.4 percent from a year ago, according to Thomson Reuters data, which has generated optimism and contributed to the market's recent gains despite turmoil in oil-producing regions and disasters in Japan.

The S&P 500 index is up 5.8 percent since the start of the year, prompting some speculation that part of the anticipated growth in profits has already been priced into shares. For details, see [ID:nN07256466]

Alcoa rose 0.8 percent to $18.07. The aluminum maker is the first Dow component to report and is seen posting growth in both earnings and revenue. JPMorgan Chase & Co (JPM.N) and Google Inc (GOOG.O) are on tap to report later in the week.

"The major companies reporting this week will give us a nice slice of what to expect this season, and if we get follow-through in the results, this could be the catalyst that finally gets more people back in the market," said Mike Shea, managing partner and trader at Direct Access Partners LLC in New York.

Shea expects trading volume, which has been among the lowest of the year in recent weeks, to pick up following the initial results. "That will mean more volatility, which will pull both the long side and short side into the market," he said.

The CBOE Volatility index .VIX fell 8.8 percent on Monday.

The Dow Jones industrial average .DJI was up 54.00 points, or 0.44 percent, at 12,434.05. The Standard & Poor's 500 Index .SPX was up 3.26 points, or 0.25 percent, at 1,331.43. The Nasdaq Composite Index .IXIC was up 1.58 points, or 0.06 percent, at 2,782.00.

NYSE Euronext NYX.N on Sunday rejected a joint buyout bid from Nasdaq OMX Group (NDAQ.O) and IntercontinentalExchange (ICE.N) and said it was sticking with an earlier bid from Deutsche Boerse AG (DB1Gn.DE). Nasdaq reaffirmed that its offer was superior to Deutsche Boerse's lower offer. [ID:nN10204369]

NYSE shares fell 1.9 percent to $37.97 while Nasdaq OMX fell 1 percent to $28.17 and ICE rose 0.7 percent to $121.36.

Also in deal news, Endo Pharmaceuticals Holding Inc (ENDP.O) said it would buy American Medical Systems Holdings Inc AMMD.O for about $2.6 billion while Level 3 Communications Inc LVLT.O agreed to buy Global Crossing Ltd GLBC.O for $1.9 billion in stock. [ID:nL3E7FB1PZ] and [ID:nL3E7FB29F]

Endo rallied 5.1 percent to $42.99 while American Medical jumped 32.1 percent to $29.50. Level 3 rose 9.7 percent to $1.58 and Global Crossing surged 55 percent to $22.98.

Biogen Idec Inc (BIIB.O) rose 5.4 percent to $77.32 and was the top percentage gainer on the Nasdaq 100 .NDX after the company's experimental multiple sclerosis drug met the main goal in the first of two important late-stage studies. [ID:nN11283786]

Flextronics International (FLEX.O) was the top percentage loser on the Nasdaq 100, falling 3.2 percent, after rival Benchmark Electronics Inc (BHE.N) cut its first-quarter outlook, citing soft demand. [ID:nL3E7FB1ZB] (Editing by Kenneth Barry)

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