Buybacks, earnings forecasts buoy indexes

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks rose on Monday on growing optimism about second-quarter earnings and plans by Johnson & Johnson (JNJ.N) and ConocoPhillips (COP.N) to buy back their own shares.

J&J gained 1 percent after the health-care company announced plans for a $10 billion share buyback. ConocoPhillips, which nearly quadrupled its repurchase plan to $15 billon, rose 3.7 percent.

Alcoa gained 1.7 percent during the regular session and was a top performer among the Dow industrials. The aluminum producer kicked off the second-quarter earnings season after the bell, reporting a profit that matched estimates but revenue that fell short of the consensus.

"The market is holding up to the summer doldrums pretty well," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore.

"Generally people are anticipating earnings are going to come out a little bit better than expected," he said.

The Dow Jones industrial average .DJI rose 38.29 points, or 0.28 percent, to end at 13,649.97. The Standard & Poor's 500 Index .SPX was up 1.41 points, or 0.09 percent, at 1,531.85. The Nasdaq Composite Index .IXIC was up 3.51 points, or 0.13 percent, at 2,670.02.

ALCOA SLIDES AFTER HOURS

Alcoa shares declined 1.2 percent to $41.85 in extended-hours trading after closing on the New York Stock Exchange at $42.36, up 70 cents.

Current projections put second-quarter earnings growth at 5.6 percent over the year-ago period, according to Reuters Estimates. The number is based on forecasts for S&P 500 companies from Wall Street strategists and industry analysts.

Shares of Johnson & Johnson (JNJ.N) gained 1 percent to close at $62.72 on the NYSE.

ConocoPhillips shares rose 3.71 percent, or $3.01, to finish at $84.05 on the NYSE and hit a fresh lifetime high of $84.73 earlier in the day, after it said it plans to buy back up to $15 billion of its shares through the end of 2008, nearly quadrupling its previous repurchase plan. For details, see ID:nN09298819

Shares of other major energy companies also gained, including Exxon Mobil Corp. (XOM.N), up 1.1 percent at $87.44, and Chevron Corp. (CVX.N), up 2.1 percent at $89.50. Both hit new lifetime highs.

BOEING AND FEDEX FLY

Boeing was among the companies that led the Dow industrials' advance, with a 1 percent gain to $99.90 on the NYSE, a day after it unveiled its 787 Dreamliner passenger jet.

Positive brokers' comments on Google Inc. (GOOG.O) pushed the Internet company's shares up 0.6 percent, boosting the Nasdaq. Google shares closed at $542.56 on the Nasdaq after theflyonthewall.com reported that Think Equity, a brokerage, had raised its price target on the stock to $700 from $620. Earlier, Google hit a lifetime high of $548.74 on Nasdaq.