By Saumya Vaishampayan and Dan Strumpf
U.S. stocks rose Monday, rebounding from steep declines Friday,
lifted by upbeat earnings news and an announcement of more stimulus
from China.
The Dow Jones Industrial Average rose 232 points, or 1.3%, to
18058 in early trading. The S&P 500 added 19 points, or 0.9%,
to 2101. The Nasdaq Composite Index added 43 points, or 0.9%, to
4975.
The rebound follows a global selloff Friday, fueled by jitters
over Greece's finances and a batch of subpar earnings reports. But
the earnings picture improved Monday, while stocks in Europe posted
a recovery as well.
Meanwhile, a move from China's central bank to free up about
$200 billion for banks to lend attracted attention across the
globe, part of China's efforts to stimulate growth. The People's
Bank of China on Sunday announced it would cut the reserve
requirement by one percentage point, its second reduction in less
than a quarter and the biggest since December 2008.
Morgan Stanley's first-quarter profit and revenue rose, beating
Wall Street estimates, as the bank benefited from a stronger
environment for deals and trading. Shares rose 0.8%.
Hasbro Inc. shares gained 6.7%, posting the biggest rise in the
S&P 500, after the toy maker posted better-than-expected
revenue and profits, despite negative foreign exchange impact.
European stocks added to the positive tone. Germany's DAX
advanced 1.4% and France's CAC 40 added 0.4%. The Stoxx Europe 600
rose 0.7%, after posting its worst daily loss in three months on
Friday.
Stocks fell Friday, with the Dow slipping 1.5% to 17826.30. The
S&P 500 fell 1.1%, to 2081.18, and the Nasdaq Composite lost
1.5% to 4931.81.
While the Chinese move helped buoy markets in Europe and the
U.S. Monday, it isn't all good news for investors, said Peter
Cardillo, chief market economist at broker-dealer Rockwell Global
Capital.
"It means that the world's economy is subject to even slower
growth, which means the potential for lower future earnings," he
said. Mr. Cardillo said he is expecting a market pullback in the
shorter term, but remains positive on stocks for the year.
Dim expectations for first-quarter earnings have been an
obstacle to stocks in recent weeks, with major indexes stalling
near all-time highs reached in early March. Analysts expect
first-quarter profits for S&P 500 companies to fall 4.5%,
including the 51 companies that have already reported results,
according to FactSet.
Chinese stocks still fell despite the positive news from China.
Hong Kong's Hang Seng Index posted its biggest one-day decline this
year, while the Shanghai Composite fell 1.6%.
Merck & Co. shares rose 1.4%. A study showed Merck's new
cancer drug Keytruda improved the survival odds of patients with
the skin cancer melanoma compared with Bristol-Myers Squibb Co.'s
Yervoy. Merck also said it has filed for U.S. regulatory approval
to market its drug as a treatment for lung cancer.
Shares of Halliburton Co. rose 2.2% after the oil-field services
provider reported revenue and earnings that surpassed analyst
expectations.
In commodity markets, gold futures slipped 0.4% to $1198.50 an
ounce. Crude-oil futures fell 1.2% to $56.61 a barrel.
The yield on the 10-year note rose to 1.872% from 1.849% on
Friday. Yields rise as prices fall.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and
Dan Strumpf at daniel.strumpf@wsj.com
Access Investor Kit for Halliburton Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4062161017
Access Investor Kit for Hasbro, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4180561072