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Stock market up ahead of corporate earnings

Cautious optimism about corporate earnings sent the stock market higher Monday.

U.S. companies start reporting their second-quarter results this week, led by aluminum producer Alcoa. Other major companies that will report include JPMorgan and Wells Fargo.

Analysts predict that earnings growth for companies in the blue-chip Standard & Poor's 500 index will come in at 3 percent in the second quarter. While that rate would be down from 5 percent in the first quarter, earnings are expected to reach record levels.

Investors and traders will search for evidence that companies are increasing revenues, not just cutting costs to boost profits. Sales growth is predicted to fall 0.3 percent in the second quarter.

"We'll be looking to see where revenue comes in," said Jim Dunigan, an executive vice president of investments at PNC Bank.

The Dow Jones industrial average rose 88.85 points to close at 15,224.69. The S&P 500 gained 0.53 percent to 1,640.46. The Nasdaq composite index rose 0.16 percent to 3,484.83.

The yield on the 10-year government note pulled back from a two-year high of 2.74 Friday.

After the markets closed, Alcoa reported a wider second-quarter loss due to weak aluminum prices.

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