Stocks closed higher on Wall Street Monday as traders turned their focus to US corporate earnings reports. Better-than-expected earnings reports from Alcoa helped push stocks higher.
Stocks ended modestly higher Monday, 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 became the first major U.S. company to report earnings late Monday, and the results were mostly good. Aluminum maker's income was higher than analysts were expecting, but its revenue fell slightly short of expectations. Later this week the pace picks up with reports from Bed Bath & Beyond, Wells Fargo and JPMorgan Chase.
A big factor driving the Standard & Poor's 500 up 9.6 percent this year has been optimism that it will be a good year for company profits. While the expectations for the first quarter are relatively modest, many investors are expecting to see more of a pickup in earnings later in the year.
"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 index 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, according to data from S&P Capital IQ.
On Monday the Dow Jones industrial average rose 48.23 points, or 0.3 percent, to close at 14,613.48. The index started the day lower and fell as much as 67 points during morning trading. Alcoa's gain of 1.8 percent was one of the biggest in the Dow. It rose 15 cents to $8.39. The stock was off seven cents in after-hours trading.