* Citigroup beats on earnings, lifting sector
* Apple, IBM slide after the close as index futures drop
* Indexes: Dow up 0.7 pct; S&P up 0.7 pct; Nasdaq up 0.5
* For up-to-the-minute market news see []
(Adds share action after Apple, IBM report earnings; updates
with trading volume)
By Edward Krudy
NEW YORK, Oct 18 (Reuters) - U.S. stocks advanced on Monday
as stronger-than-expected profit from Citigroup helped
financial shares shake off worries that the foreclosure mess
could threaten the stability of the housing market.
Apple Inc <AAPL.O>, which hit an all-time high during the
regular session, disappointed investors after reporting gross
margins and iPad shipments. Its shares skidded 5 percent in
after-hours trading while stock index futures fell, suggesting
a weak market opening on Tuesday. For details, see
[].
Shares in IBM also fell after the closing bell, losing 3.5
percent to $137.84. The stock had reached a 52-week high during
the regular session. International Business Machines Corp
<IBM.N> reported a higher-than-expected profit and raised its
outlook for the full year, but the shares fell on sluggish
sales of technology services. [].
"Both stocks have kind of gone parabolic into the
earnings," said Nick Kalivas, an analyst at MF Global in
Chicago. "My fear is we're going to get a buy the rumor, sell
the fact trade."
In regular trading, Citigroup <C.N> gained 5.6 percent to
$4.17 after it reported its third consecutive quarterly profit.
Last week JPMorgan Chase and Co's <JPM.N> profits beat
estimates. The KBW Bank index <.BKX> rose 3 percent, recovering
some of the losses banks had in the last few days.
The Dow Jones industrial average <> rose 80.91 points,
or 0.73 percent, at 11,143.69. The Standard & Poor's 500 Index
<.SPX> gained 8.52 points, or 0.72 percent, at 1,184.71. The
Nasdaq Composite Index <> added 11.89 points, or 0.48
percent, at 2,480.66.
Citigroup said it is looking at the home loans it bundled
into bonds and sold to investors. So far, it has not found any
problems.
The largest U.S. bank, Bank of America <BAC.N>, reports
earnings on Tuesday. Bank of America's shares rose 3 percent to
$12.40.
Before the close on Monday, around 10 percent of S&P 500
companies had reported earnings, with 84 percent of those
beating expectations, according to data compiled by Thomson
Reuters.
Apple shares hit a life high at $319 during the day as
analysts expected fourth-quarter earnings to showcase Apple's
powerful one-two punch of the iPhone and the iPad.
Apple's shares closed up 0.4 percent to $315.79, then fell
in extended-hours trading to $301.79. Traders in Apple's
options were pricing in a potential post-earnings swing of
about 7.5 percent.
Shares of IBM rose 1.3 percent to $142.83 and were the top
boost to the Dow industrials before the company's earnings
report.
Northeast Utilities <NU.N> will buy NSTAR <NST.N> in a $4.2
billion all-stock deal to create one of the largest U.S.
utilities, the companies said. Shares in both companies fell,
with Northeast down 0.9 percent to $30.42 and NSTAR off 0.6
percent to $39.30.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of about 2 to 1. The ratio was about the same on the
Nasdaq.
About 7.66 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and the Nasdaq -- below
the year's average so far of about 8.77 billion.
(Reporting by Edward Krudy; Additional reporting by Doris
Frankel; Editing by Kenneth Barry)
