* Caterpillar jumps after broker comments
* Gannett rises after results beat expectations
* For up-to-the-minute market news, click []
(Updates to late afternoon, changes byline)
By Rodrigo Campos
NEW YORK, Oct 19 (Reuters) - U.S. stocks rallied on
Monday, extending a two-week run-up as better-than expected
corporate earnings increased investors' optimism.
Earnings from companies, including Gannett Co Inc <GCI.N>,
which beat analysts' expectations, and positive broker
commentary on Caterpillar Inc <CAT.N> further encouraged
investors looking for confirmation the economy is healing.
"So far three out of four earnings have been better than
expected, no real horror stories, and at this point (the
advance) looks set to continue," said Frank Lesh, broker and
futures analyst with Future Path Trading in Chicago.
"We still got a couple more weeks to go (in earnings). But
so far, so good. The market is telling us to be long and stay
long."
As of Monday, 62 companies in the S&P 500 had reported
earnings, with 79 percent above analysts' expectations,
according to data compiled by Thomson Reuters.
Earnings season heats up this week, with 13 Dow components
and 135 S&P 500 companies set to report.
The Dow Jones industrial average <> gained 112.76
points, or 1.13 percent, to 10,108.67. The Standard & Poor's
500 Index <.SPX> rose 11.54 points, or 1.06 percent, to
1,099.22. The Nasdaq Composite Index <> added 19.28
points, or 0.89 percent, to 2,176.08.
Monday's rally occurred on the 22nd anniversary of Black
Monday, as Oct. 19, 1987, is known, which was the day the Dow
industrials fell more than 22 percent -- still the largest
daily percentage drop on record.
Caterpillar led the Dow, gaining 5.6 percent to $57.62
after Bank of America-Merrill Lynch raised its price target to
$65 from $52 and increased its 2010 and 2011 earnings per
share expectations, citing a faster recovery in machinery
revenue next year. Caterpillar is set to report results on
Tuesday.
Gannett Co Inc <GCI.N> jumped 7.9 percent to $14.03 after
the largest U.S. newspaper publisher posted lower quarterly
profit, but still beat expectations amid cost cutting. For
details, see []
Diversified manufacturer Eaton Corp <ETN.N> rose 5.8
percent to $63.92 after it reported profit that beat estimates
and said it saw early signs of recovery in its markets.
[]
In other news, the Market Vector Agribusiness ETF <MOO.P>
gained 3.3 percent, with U.S.-traded shares of Potash Corp of
Saskatchewan <POT.N> up 7.1 percent to $104.31 after a
research report speculated miner BHP Billiton <BHP.AX> <BHP.N>
could afford offering a 30 percent premium to acquire the
Canadian fertilizer maker. [].
Home builders' shares slid, with the Dow Jones home
construction index <.DJUSHB> down 1.6 percent.
Frank Husic, managing partner and chief investment officer
at Husic Capital Management in San Francisco, said the home
building sector's shares were hurt by concerns the current
$8,000 tax credit to first-time home buyers, which expires on
Nov. 30, would not be extended. For related news see
[].
Shares of KB Home <KBH.N> dropped 2.7 percent to $15.40.
The technology sector will be in focus after the closing
bell, as bellwethers Apple Inc <AAPL.O> and Texas Instruments
Inc <TXN.N> will post their quarterly scorecards.
"There is anticipation that we're going to get
better-than-expected top- and bottom-line results from some
companies like Apple," said Joe Arsenio, president of Arsenio
Capital Management in Larkspur, California.
(Editing by Jan Paschal)
