NEW YORK (Reuters) – Stocks edged higher on Monday as investors showed caution ahead of corporate earnings and key auctions for European debt this week.

Alcoa Inc (AA.N), the largest U.S. aluminum producer, will unofficially kick off the earnings season after the closing bell. Alcoa rose 3 percent to $9.43.

Google Inc (GOOG.O) was off 3.7 percent at $626.19 as the biggest drag on both the benchmark S&P 500 index and Nasdaq 100 after Motorola Mobility Holdings Inc's (MMI.N) warning of weaker-than-expected financial results raised concerns about Google's pending acquisition of the smartphone maker.

Debt sales by Spain and Italy later in the week should provide insight about confidence in proposed solutions to the euro zone financial crisis.

"That is what the market wants to get a look at – what is it that these multinationals are seeing in the global environment that gives them pause, or is the tone going to be a little better than expected," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"There is this sense that we really need to see something that is going to convince us that this EU challenge … is a headwind that can be managed."

After meeting in Berlin, German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greece it will get no more bailout funds until it agrees with creditor banks on a bond swap and pressed for an early deal to avert a potential default.

Investors have grown more skeptical about whether European politicians can craft a plan which moves the region closer to solving its debt crisis. This week's bond auctions by Italy and Spain will gauge the willingness of investors to pump more money into the region's troubled sovereigns.

The Dow Jones industrial average (.DJI) gained 25.96 points, or 0.21 percent, to 12,385.88. The Standard & Poor's 500 Index (.SPX) added 2.54 points, or 0.20 percent, to 1,280.35. The Nasdaq Composite Index (.IXIC) rose 5.01 points, or 0.19 percent, to 2,679.23.

Traders also eyed monetary policy announcements from the European Central Bank and the Bank of England, which will come on Thursday. Investors are keen to hear ECB President Mario Draghi's latest comments on ways to ease the debt crisis.

Fourth-quarter earnings for S&P 500 companies were expected to rise 7.8 percent from a year ago, according to a Thomson Reuters forecast, down from 17.6 percent, predicted in July.

The lower revisions were due in part to expected fallout from the euro zone debt crisis and the region's sluggish economic growth.

The S&P 500 faces strong technical resistance as it has been unable to pierce through 1,285, the closing high set in late October.

Apple Inc (AAPL.O) gained 0.4 percent to $423.99 after Goldman Sachs raised its price target, saying the technology giant is set to report a healthy December quarter.

(Reporting By Chuck Mikolajczak; Editing by Kenneth Barry)

NEW YORK (Reuters) – U.S. stocks were slightly higher on Monday as a tug-of-war continued between investor optimism about U.S. corporate earnings and fears about a possible lack of demand for Europe's debt at auctions this week.

Major indexes bounced between modest gains and losses at midday, with the technology sector leading losses. Google Inc (GOOG.O) was off 3.5 percent at $626.94.

German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin, but traders expected little of significance to emerge. Investors grew more skeptical about whether European politicians could come up with a plan to solve the region's debt crisis.

They were also cautious ahead of this week's bond auctions by Italy and Spain, which will gauge the willingness of investors to plough more money into the region's troubled sovereigns.

"Corporate earnings are one of the few strengths we have in this economy that is not very strong," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. "But Europe is the biggest concern out there, sort of the disaster waiting to happen," and investors aren't able to shrug that off, he said.

Traders also eyed monetary policy announcements from the European Central Bank and the Bank of England, coming on Thursday, with investors keen to hear ECB President Mario Draghi's latest comments on ways to ease the debt crisis.

The Dow Jones industrial average (.DJI) was up 18.50 points, or 0.15 percent, at 12,378.42. The Standard & Poor's 500 Index (.SPX) added 1.48 points, or 0.12 percent, at 1,279.29. The Nasdaq Composite Index (.IXIC) put on 1.61 points, or 0.06 percent, at 2,675.83.

The S&P 500 faces strong technical resistance as it has been unable to pierce through 1,285, the closing high set in late October.

Alcoa Inc (AA.N), the largest U.S. aluminum producer, will unofficially kick off the earnings season after the bell. Alcoa rose 2.4 percent to $9.38.

Fourth-quarter earnings for S&P 500 companies were expected to rise 7.8 percent from a year ago, according to a Thomson Reuters forecast, down from 17.6 percent, predicted in July.

The lower revisions were due in part to expected fallout from the debt crisis and the region's sluggish economic growth.

Apple Inc (AAPL.O) gained 0.4 percent to $423.99 after Goldman Sachs raised its price target, saying the technology giant is set to report a healthy December quarter.

(Reporting By Angela Moon; editing by Jeffrey Benkoe)

NEW YORK (Reuters) – The S&P and Nasdaq declined on Tuesday as investors sold commodity-related shares, and saw the market digressing further from its recent rally.

Shares of Alcoa Inc (AA.N) shares, however, shot up 3.7 percent to $17.86 and helped to support the Dow, on market talk that Rio Tinto (RIO.AX) was lining up a bid to buy the U.S. aluminum company. Options activity also rose, though neither Alcoa nor Rio Tinto would comment on the rumors.

The energy sector, which gained 16 percent in the first quarter, led losses on the S&P 500. The S&P energy index (.GSPE) was down 1.6 percent.

“You’ve had a tremendous run up here, so you’ve got some profit-taking and an underlying rotation,” out of commodity-related shares and into more defensive areas, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

But he said he sees any pullback as short-term and expects the market to remain on an upward trend. The S&P is up nearly 30 percent since the start of September, when the recent rally began.

The Dow Jones industrial average (.DJI) was up 16.42 points, or 0.13 percent, at 12,823.78. The Standard & Poor’s 500 Index (.SPX) was down 2.84 points, or 0.21 percent, at 1,358.38. The Nasdaq Composite Index (.IXIC) was down 16.47 points, or 0.58 percent, at 2,847.61.

MasterCard Inc (MA.N) rose 2.8 percent to $283 after the world’s second-largest credit card processing network posted a 24 percent jump in quarterly profit.

(Additional reporting by Chuck Mikolajczak)

(Reporting by Caroline Valetkevitch)

NEW YORK (Reuters) – U.S. stocks fell on Tuesday after a disappointing revenue miss from Alcoa to start off the earnings season and a sell-off in commodities, coupled with Japan’s upgrade of the severity of its nuclear crisis.

Shares in Alcoa Inc (AA.N) slipped 5 percent to $16.88 shortly after the open. The company reported revenue that missed forecasts after the closing bell on Monday.

Japan raised the severity of the Fukushima nuclear power plant accident to the highest level on the International Nuclear and Radiological Event Scale, putting it on par with the Chernobyl 1986 disaster.

Mining stocks fell as metals prices dipped on worries Japan’s massive earthquake and a nuclear crisis would weaken recovery prospects in the world’s third-largest economy.

Selling in key commodities were also triggered after Goldman Sachs (GS.N) warned its clients to lock in trading profits before oil and other markets reverse. U.S. traded shares of Rio Tinto (RIO.N) fell 2 percent to $72.36.

“The market is increasingly becoming concerned about the situation in Japan and that high oil prices and high commodity prices will eventually hurt economic growth,” said Mark Bronzo, money manager at Security Global Investors in Irvington, New York.

The Dow Jones industrial average (.DJI) was down 64.56 points, or 0.52 percent, at 12,316.55. The Standard & Poor’s 500 Index (.SPX) was down 6.89 points, or 0.52 percent, at 1,317.57. The Nasdaq Composite Index (.IXIC) was down 14.67 points, or 0.53 percent, at 2,756.84.

(Reporting by Angela Moon, Editing by Chizu Nomiyama)

NEW YORK (Reuters) – Stocks rose on Monday as investors bet on a strong corporate earnings season, which Alcoa Inc (AA.N) unofficially launches after the market’s close.

Profits for S&P 500 companies are seen rising 11.4 percent from a year ago, according to Thomson Reuters data, which has generated optimism and contributed to the market’s recent gains despite turmoil in oil-producing regions and disasters in Japan.

The S&P 500 index is up 5.8 percent since the start of the year, prompting some speculation that part of the anticipated growth in profits has already been priced into shares.

Alcoa rose 0.8 percent to $18.07. The aluminum maker is the first Dow component to report and is seen posting growth in both earnings and revenue. JPMorgan Chase & Co (JPM.N) and Google Inc (GOOG.O) are on tap to report later in the week.

“The major companies reporting this week will give us a nice slice of what to expect this season, and if we get follow-through in the results, this could be the catalyst that finally gets more people back in the market,” said Mike Shea, managing partner and trader at Direct Access Partners LLC in New York.

Shea expects trading volume, which has been among the lowest of the year in recent weeks, to pick up following the initial results. “That will mean more volatility, which will pull both the long side and short side into the market,” he said.

The CBOE Volatility index (.VIX) fell 8.8 percent on Monday.

The Dow Jones industrial average (.DJI) was up 54.00 points, or 0.44 percent, at 12,434.05. The Standard & Poor’s 500 Index (.SPX) was up 3.26 points, or 0.25 percent, at 1,331.43. The Nasdaq Composite Index (.IXIC) was up 1.58 points, or 0.06 percent, at 2,782.00.

NYSE Euronext (NYX.N) on Sunday rejected a joint buyout bid from Nasdaq OMX Group (NDAQ.O) and IntercontinentalExchange (ICE.N) and said it was sticking with an earlier bid from Deutsche Boerse AG (DB1Gn.DE). Nasdaq reaffirmed that its offer was superior to Deutsche Boerse’s lower offer.

NYSE shares fell 1.9 percent to $37.97 while Nasdaq OMX fell 1 percent to $28.17 and ICE rose 0.7 percent to $121.36.

Also in deal news, Endo Pharmaceuticals Holding Inc (ENDP.O) said it would buy American Medical Systems Holdings Inc (AMMD.O) for about $2.6 billion while Level 3 Communications Inc (LVLT.O) agreed to buy Global Crossing Ltd (GLBC.O) for $1.9 billion in stock.

Endo rallied 5.1 percent to $42.99 while American Medical jumped 32.1 percent to $29.50. Level 3 rose 9.7 percent to $1.58 and Global Crossing surged 55 percent to $22.98.

Biogen Idec Inc (BIIB.O) rose 5.4 percent to $77.32 and was the top percentage gainer on the Nasdaq 100 (.NDX) after the company’s experimental multiple sclerosis drug met the main goal in the first of two important late-stage studies.

Flextronics International (FLEX.O) was the top percentage loser on the Nasdaq 100, falling 3.2 percent, after rival Benchmark Electronics Inc (BHE.N) cut its first-quarter outlook, citing soft demand.

(Editing by Kenneth Barry)

NEW YORK (Reuters) – Stocks rose on Monday on hopes of strong corporate earnings as aluminum company Alcoa (AA.N) will be the first Dow component to release first-quarter results.

Alcoa, which is due to report after the market’s close, rose 1.4 percent to $18.17. The company is expected to report earnings of 27 cents per share on revenue of $6.07 billion, according to Thomson Reuters estimates.

The earnings season is off to a good start because of the economy, but companies are likely to come out with conservative outlooks, Jonathan Golub, strategist at UBS in New York, said.

“With the scars from the financial crisis still healing, it’s no surprise that managements have been cautious in their guidance,” he said.

Concerns about the impact of natural disasters and geopolitical turmoil mean companies are more likely to play it safe and highlight the uncertainty of supply chain disruptions emanating from Japan and rising input costs, Golub said.

Market reaction was relatively calm after another strong aftershock struck northeast Japan on Monday and the evacuation zone around a crippled nuclear plant was expanded.

Shares of Biogen Idec Inc (BIIB.O) rose 5.4 percent to $77.32 after the company’s experimental multiple sclerosis drug met the main goal in the first of two important late-stage studies.

Endo Pharmaceuticals Holding Inc (ENDP.O) shares rose 8.6 percent to $44.38 after announcing plans to acquire American Medical Systems Holdings Inc (AMMD.O), a urological medical devices supplier.

American Medical Systems shares jumped 32.1 percent to $29.50.

The Dow Jones industrial average (.DJI) was up 36.44 points, or 0.29 percent, at 12,416.49. The Standard & Poor’s 500 Index (.SPX) was up 3.23 points, or 0.24 percent, at 1,331.40. The Nasdaq Composite Index (.IXIC) was up 6.53 points, or 0.23 percent, at 2,786.95.

(Reporting by Angela Moon, Editing by Kenneth Barry)

DOW LEADERS: Boeing rose 3 percent after the aircraft maker reported that it expects to deliver its long-awaited 787 jet in the third quarter. Caterpillar gained 2 percent. The two companies contributed more than half of the Dow Jones industrial average’s 50 point rise.

JOBS ON LEAVE: Apple Inc. weighed on the Nasdaq composite index after the company announced that its CEO, Steve Jobs, was taking another medical leave. Apple fell 2 percent to $340.65.

INDEXES: The Dow gained 50 points to close at 11,837. The Standard & Poor’s 500 rose 1.7 to 1,295. The Nasdaq rose 10 to 2,765.

NEW YORK – New signs of surging corporate profits pointed to early gains in the stock market Tuesday.

Aluminum giant Alcoa Inc. unofficially kicked off the fourth quarter earnings season Monday when it reported that it beat Wall Street estimates. The company reported earnings of 24 cents per share, well above the 18 cents per share that analysts were forecasting. It also said that it expected a 12 percent jump in demand this year, with sales up as much as 11 percent in the automotive sector.

Its shares slipped 22 cents to $16.49 in pre-market trading, but its shares have jumped 50 percent over the last six months, one sign that investors believe that the global economic recovery is gaining momentum.

Two major retailers separately boosted their earnings outlook. Sears Holdings Corp. said that its full-year earnings will be between $1.16 and $1.88 per share, well above the 88 cents per share that analyst predicted. Tiffany & Co. said that better-than-expected holiday sales would push its full-year earnings up at least six cents per share to $2.83. Sears shares rose 9 percent in pre-market trading while Tiffany gained 2 percent.

Ahead of the opening bell, Dow Jones industrial average futures rose 43 points, or 0.4 percent, to 11,638. S&P 500 futures gained 5, or 0.4 percent, to 1,271. Nasdaq 100 futures rose 9, or 0.4 percent, to 2,291.

European stock markets jumped after Japan said that it considering buying bonds of struggling countries in the European Union. The move would help send bond yields down and ease debt pressures on countries like Ireland and Portugal. The Euro Stoxx 50, which tracks blue chip companies in countries that use the euro, rose 0.9 percent.

Stocks ended mixed in Asia.

In economic news, the Labor Department will release its report on job openings in November. The Commerce Department will release its report on business inventories.

The dollar was flat against an index of six heavily traded currencies.

NEW YORK (Reuters) – U.S. stock index futures pointed to a lower open on Wall Street on Monday, with futures for the S&P 500 down 0.52 percent, Dow Jones futures down 0.44 percent and Nasdaq 100 futures down 0.35 percent at 4:05 a.m. EST.

* European stocks were down 0.7 percent in morning trade, led lower by retreating banking shares, hurt by nagging concerns over the euro zone debt crisis.

* Pressure is growing on Portugal from Germany, France and other euro zone countries to seek financial help from the EU and IMF to stop the bloc’s debt crisis from spreading, a senior euro zone source said on Sunday.

* U.S. Chemicals firm DuPont (DD.N) said on Sunday it will buy Danish food ingredients and enzymes firm Danisco (DCO.CO) for $5.8 billion, boosting its position in the fast-growing food sector.

* French drugmaker Sanofi Aventis SA (SASY.PA) said on Sunday it was in discussions with U.S. bid target Genzyme Corp (GENZ.O) over ways to value a key Genzyme drug, in a sign the two sides are moving closer to a deal.

* British medical equipment firm Smith & Nephew (SN.L) rejected a 7 billion-pounds ($10.9 billion) takeover approach from U.S. rival Johnson & Johnson (JNJ.N) late last year, Sky News said, without citing sources.

* U.S. software firm iGate (IGTE.O), backed by private equity firm Apax Partners, has agreed to buy a majority stake in India’s Patni Computer (PTNI.BO) for $862 million, two sources with knowledge of the matter said, marking one of the largest deals in India’s technology sector.

* Duke Energy Corp (DUK.N) is near $13 billion-plus deal to buy Progress Energy Inc (PGN.N), a move that would create the largest U.S. power company, sources familiar with the matter said.

* A group of private equity firms including Apollo Global Management (APOLO.UL) is interested in a buyout of food and beverage company Sara Lee Corp (SLE.N), and has made an approach to the company, a source familiar with the situation said on Sunday.

* Oil surged almost $2 on Monday to within 2 cents of $90 a barrel after a leak shut an Alaskan pipeline that carries 12 percent of U.S. crude output.

* China’s global trade surplus narrowed in 2010 for the second straight year, giving Beijing grounds to rebuff U.S. pressure for faster currency appreciation ahead of a visit to Washington next week by President Hu Jintao.

* Japanese markets were closed for a public holiday.

* U.S. stocks fell on Friday after a court ruling in a key foreclosures case prompted investors to pull out of bank stocks, adding to weakness after a lackluster jobs report, but despite the day’s losses, the S&P 500 and Dow recorded their sixth straight week of advances.

* the Dow Jones industrial average (.DJI) slipped 22.55 points, or 0.19 percent, to 11,674.76. The Standard & Poor’s 500 Index (.SPX) was off 2.35 points, or 0.18 percent, to 1,271.50. The Nasdaq Composite Index (.IXIC) declined 6.72 points, or 0.25 percent, to 2,703.17.

(Reporting by Blaise Robinson; Editing by Hans Peters)

NEW YORK – Stocks rose sharply Tuesday after earnings reports from Alcoa and CSX reassured investors about the pace of the economic recovery.

Investors reacted warmly Tuesday to better-than-expected profits from aluminum maker Alcoa Inc. and railroad operator CSX Corp. The Dow Jones industrial average rose more than 170 points in midday trading.

The companies, among the first to report second-quarter earnings, also issued upbeat forecasts for the rest of the year. That was heartening news for investors who have been concerned that the recovery was stalling, or that the economy might even fall back into recession.

“When we go back to earnings and fundamentals, companies are delivering,” said Tom Karsten, senior managing partner at Karsten Financial in Fort Worth, Texas.

Alcoa’s earnings reports are closely watched because its varied customer base provides a snapshot of a broad range of other industries. It is also a component of the Dow Jones industrial average. CSX also provides insight into economic activity because it ships a wide range of products.

Alcoa said global consumption of aluminum will grow this year by more than it had forecast just three months ago. There have been concerns that the global economic recovery will end as many European nations face mounting government debt problems and high unemployment slows growth in the U.S.

CSX, meanwhile, said it sees its the economy’s upward momentum continuing this year.

Frank Ingarra, co-portfolio manager of Hennessy Funds in Stamford, Conn., said Alcoa and CSX’s results lifted the market because they hit on the two themes that traders are looking for in earnings: revenue growth and optimistic outlooks.

“That’s why the earnings were so good,” Ingarra said. “You saw that top-line growth and good guidance.”

During the recession, companies that made money often did so by cutting costs rather than bringing in sales. So sales growth is a sign that business is indeed picking up.

The Commerce Department reported Tuesday that the U.S. trade deficit increased to its widest level in 18 months as an increase in exports was outpaced by rising imports. A jump in both imports and exports is a sign that the economy is growing.

Earnings will likely continue to dictate trading over the next few weeks as hundreds of companies release results. Chipmaker Intel Corp. reports earnings after the close of stock trading Tuesday. It is considered a good gauge of the health of the economy since its sales are driven by consumers and businesses buying computers. Retail sales have remained sluggish in recent months amid high unemployment.

European markets rose following the earnings reports from Alcoa and CSX, which were released after markets closed Monday. Investors there brushed off a credit rating downgrade to Portugal’s debt.

In midday trading, the Dow rose 170.74, or 1.7 percent, to 10,386.78. The Standard & Poor’s 500 index rose 18.29, or 1.7 percent, to 1,097.04, while the Nasdaq composite index rose 38.61, or 1.8 percent, to 2,236.97.

Alcoa shares rose 16 cents to $11.03. CSX dipped 18 cents to $52.28 after rising earlier in the day. Intel shares rose 41, or 2 percent, to $20.98.

One company whose shares struggled despite the broad gains Tuesday was Apple Inc. The stock dropped $7.58, or 2.9 percent, to $249.71 a day after Consumer Reports said it would not recommend buying the company’s new iPhone because of its antenna design.

More than eight stocks rose for every one that fell on the New York Stock Exchange. Volume came to 357.5 million shares compared with 298.5 million shares traded at the same time Monday.

The Dow has risen for five straight sessions. Last week was the best week for the Dow since July 2009. It followed those gains with a modest climb of 18 points Monday.

If the Dow closes higher again Tuesday, it would be the first six-day winning streak since a stretch in late April that sent the index to its highest level of the year. The Dow remains nearly 9 percent below that April high despite the recent gains.

Stocks had sold off in May and June because of worries that the economy was slowing. Tim Courtney, chief investment officer at Burns Advisory Group in Oklahoma City, said investors were selling as they tried to predict how much a slowdown in the economy would affect earnings. However, Courtney said, the sell-off went too far, which has helped the market in recent days.

“Generally the market overreacts,” he said.

Bond prices dipped. The yield on the 10-year note rose to 3.11 percent from 3.07 percent late Monday. Its yield helps set interest rates on consumer loans and mortgages. An auction for 10-year notes is slated for later Tuesday.

The Russell 2000 index of smaller companies rose 14.77, or 2.4 percent, to 636.38.

Overseas, Britain’s FTSE 100 rose 2 percent, Germany’s DAX index gained 1.9 percent, and France‘s CAC-40 rose 2 percent. Japan’s Nikkei stock average fell 0.1 percent.