(Updates to late morning)
By Jennifer Coogan
NEW YORK, Jan 14 (Reuters) - U.S. stocks rebounded on
Monday from last week's losses after IBM <IBM.N> reported
higher-than-expected preliminary financial results, lifting the
technology sector.
The encouraging earnings assessment from International
Business Machines Corp struck a positive note in a week of
crucial earnings reports that will include major banks under
pressure from subprime losses, including Citigroup Inc <C.N>
and Merrill Lynch & Co Inc <MER.N>.
"There's more recognition in the markets that the infotech
space is where you do find a lot of companies with strong
balance sheets and good business prospects," said Subodh Kumar,
chief investment strategist at Subodh Kumar & Associates in
Toronto. "The talk on Wall Street is about recession, so when
you find (a sector) like that, that's where the market is
tending to gravitate."
The Dow Jones industrial average <> was up 131.61
points, or 1.04 percent, at 12,737.91. The Standard & Poor's
500 Index <.SPX> was up 11.68 points, or 0.83 percent, at
1,412.70. The Nasdaq Composite Index <> was up 32.30
points, or 1.32 percent, at 2,472.24.
Stocks suffered a third straight weekly loss last week. The
S&P 500's year-to-date 4.6 percent decline was the fourth-worst
start in the history of the Standard & Poor's benchmark.
Citigroup and Merrill have been mentioned in news reports
as seeking more cash from sovereign funds and other wealthy
investors as they face heavy losses. For details, see
[]. Citigroup could take writedowns as high as $24
billion, CNBC said.
IBM said fourth-quarter earnings from continuing operations
rose 24 percent on a 10 percent increase in revenue.
[].
IBM shares rose 6.3 percent to $103.79. Other blue-chip
tech stocks on the rise included microchip maker Intel Corp
<INTC.O>, up 3.1 percent to $22.68 and software maker Microsoft
Corp <MSFT.O>, up 1.3 percent at $34.36.
Financials were among the biggest drags on the market after
M&T Bank <MTB.N> reported its earnings sank 70 percent on debt
write-downs and turmoil in the residential real estate market.
M&T shares fell 2.6 percent to $71.80.
Retailers were under pressure after Sears Holdings Corp
<SHLD.O> said sales fell during the key holiday period, sending
shares of the company down 6.5 percent to $89.78.
Also weighing on retailers were price target cuts on more
than a dozen stocks by Goldman Sachs, including Coach Inc
<COH.N>, Tiffany & Co <TIF.N>, Family Dollar Stores Inc <FDO.N>
and Costco Wholesale Corp <COST.O>.
Coach shares were down 3.5 percent to $25.91 and Tiffany
shares fell 4.2 percent to $34.29. Family Dollar shares fell 1
percent to $15.74 and Costco dropped 1.8 percent to $65.26.
Health stocks, which are the best performing group so far
in 2008, were down after drug makers Merck & Co <MRK.N> and
Schering-Plough Corp <SGP.N> said a closely watched study
involving its joint cholesterol treatment, Vytorin, failed to
meet its goal.
Schering shares fell 2.9 percent to $26.93 and Merck stock
lost 2 percent to $59.41.
(Editing by Kenneth Barry)
