By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks shed Monday losses to turn
modestly higher as investors again viewed a market drop as a buying
opportunity.
"The declines are shallow as buyers come in because they need
additional equity exposure. The path of least resistance is up,"
said Marc Chaikin, CEO of Chaikin Analytics.
After rising to a record closing high of 1,570.25 a week ago,
the S&P 500 index (SPX) declined 1% last week following the
smallest increase in jobs in nine months and other reports on
manufacturing and services also came in below expectations.
The jobs report prompted worries the U.S. economy had hit a soft
patch. Breaking down the jobs report
Still, the S&P 500 remains 9.3% higher for the year, with
corporate profit and the Federal Reserve's ongoing bond-buying
program helping support equities.
"There are so many skeptics about the market going to new highs;
pullbacks like last week are frustrating the bears, since there is
no downside follow through," said Chaikin.
On Monday, the S&P 500 index was lately up 4.99 points, or
0.3%, at 1,558.27, with consumer-related companies pacing the gains
that covered all but two of its 10 major sectors.
After a 67-point fall earlier in the day, the Dow Jones
Industrial Average (DJI) was more recently ahead 8.22 points, or
0.1%, at 14,573.47.
Seventeen of its 30 components were in positive terrain, led by
Coca-Cola Co. (KO) , Walt Disney Co. (DIS) and Wal-Mart Stores Inc.
(WMT)
Pharmaceutical giant Johnson & Johnson (JNJ) led blue-chip
decliners, off 1.3% following a downgrade to neutral from
overweight at J.P. Morgan.
After the close, Alcoa Inc. (AA) becomes the first member of the
Dow Jones Industrial Average to release results for the first
quarter when the aluminum producer reports its results.
While Alcoa's results mark the unofficial start of the earnings
season, analysts cautioned against reading too much into its
report.
"Do not get caught up in the hype of Alcoa being a good proxy
for the upcoming earnings season because it is not and certainly
its stock price has not reflected it either," said Nick Raich,
chief executive officer at The Earnings Scout.
Shares of Alcoa have been languishing over the past 18 months,
and analysts aren't too hopeful the first-quarter report will help
much.
BioCryst Pharmaceuticals Inc. (BCRX) shares leapt after China
speed up the approval of its anti-influenza drug Peramivir. Lufkin
Industries Inc. (LUFK) rallied after the General Electric Co. (GE)
said it would acquire the manufacturer of oil-well pumps for about
$3.3 billion, or $88.50 a share.
The Nasdaq Composite (RIXF) added 7.91 points, or 0.3%, to
3,211.76.
For every five stocks on the decline roughly nine rose on the
New York Stock Exchange, were 324 million shares traded as of 2:45
p.m. Eastern.
Composite volume surpassed 1.9 billion.
Fed Chairman Ben Bernanke is scheduled to give a speech after
Monday's close, with investors looking for any clues as to how long
the central bank would continue its monetary easing.
"It's still a bad-news, good-news market where modestly poor
economic data keeps the Fed engaged," said Paul Nolte, managing
director at Dearborn Partners in Chicago.
"We're still within a few percentage points of all-time highs.
Along the lines of Mark Twain, I think the death of this market has
been greatly exaggerated," Nolte said. "A little bit of a pullback
is not a bad thing and has been expected for a while."
Oil prices were rebounding from last week's loss of nearly 5%,
with benchmark oil for May delivery (CLK3) lately up 26 cents at
$92.96 a barrel on the New York Mercantile Exchange.
The U.S. dollar (DXY) gained against other currencies including
the yen (USDJPY) . Treasury prices were mixed, with the yield on
the 10-year note (10_YEAR) lately at 1.729%.
The biggest earnings of the week will come from J.P. Morgan
Chase & Co. (JPM) and Wells Fargo & Co. (WFC), which both
report on Friday. . Read: Earnings are first big stock test since
market high
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