Stocks ended higher yesterday, shrugging off an early decline, as investors waited to see whether big U.S. companies would deliver on expectations of strong earnings in 2013.
Alcoa was the first major U.S. company to report earnings late Monday, and the results were mostly good. The aluminum maker's income was higher than analysts expected, but its revenue fell slightly short of expectations. Later this week there will be reports from Bed Bath & Beyond, Wells Fargo and JPMorgan Chase.
A big factor driving the Standard & Poor's 500 index up 9.6 percent this year has been optimism that it will be a good year for company profits. "We need to see some earnings growth here to justify the big gains we've seen in the first quarter," said Ryan Detrick, a senior technical analyst at Schaeffer's Investment Research.
Earnings for companies in the S&P 500 are expected to rise by 0.7 percent from the first quarter of last year, but that growth is expected to accelerate sharply to 13 percent in the final three-month period of the year.
Monday the Dow Jones industrial average rose 48.23 points to close at 14,613.48. The S&P closed up 0.63 percent to 1,563.07. The Nasdaq composite index rose 0.57 percent to 3,222.25.