U.S. stocks traded higher on Monday, shaking off a mostly lower open, as investors awaited the beginning of earnings season. (Tweet This)
“The key to this week is the kickoff to the big earnings,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “Technically speaking the market is in pretty good shape. That could change once earnings begin to flow in.”
The major indices held above key levels, with the S&P 500 above 2,103, the Nasdaq above 5,000 and the Dow Jones industrial average above 18,000.
Still, equities traded within narrow range on Monday as investors remained cautious ahead of the quarterly results. Corporate profit expectations are significantly negative for the first time in six years, with Thomson Reuters reporting a likely 2.9 percent drop in S&P 500 net income.
BTIG Chief Technical Strategist Katie Stockton noted intraday resistance levels for the S&P 500 of 2,107 to 2,109.
Despite some expectations of a short-term pullback, Stockton said in a morning report that “we expect the SPX to follow the leaders to a new all-time high, with the belief that earnings season is likely to yield more breakouts than breakdowns among individual stocks.”
S&P and Nasdaq breakouts above resistance are significant indicators for the overall market trend, said JJ Kinahan, chief strategist at TD Ameritrade. “If we do get financials going and tech going the market can really drive higher,” he said.
“We really have a bias towards financials this week in terms of earnings reporting,” said Art Hogan, chief market strategist at Wunderlich Securities. “Everyone tries to extrapolate what JPMorgan means for P&G.”
“Last week was really driven by the strong energy trade and M&A,” he said.
Oil pared earlier gains with crude just 30 cents higher at $51.93 a barrel on the New York Mercantile Exchange.
The U.S. dollar gained against major world currencies, with the euro lower below $1.06.
“Today really … is just a waiting game,” said Peter Boockvar, chief market analyst at The Lindsey Group. “A little bit of the dollar and oil. That’s going to help us but I’m not sure which way.”
The S&P 500 traded up 3 points, or 0.14 percent, at 2,104, with financials leading six sectors higher and energy the greatest laggard.
The Nasdaq traded up 23 points, or 0.47 percent, at 5,019.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.
Advancers were a step ahead of decliners on the New York Stock Exchange, with an exchange volume of 170 million and a composite volume of 828 million in late morning trade.
Gold futures fell $5.60, or 0.46 percent, to 1,199.00 an ounce as of 11:10 a.m.
No major economic data is expected Monday. Retail sales and the Producer Price Index come out Tuesday morning.
Chinese equities continued to advance, closing at 7-year highs on Monday, despite a greater-than-expected decline in Chinese exports. The negative data sent European stocks lower after a week of strong gains.
U.S. stocks closed higher on Friday, marking a three-day rally with the Dow topping 18,000 for the first time in April.
In U.S. corporate news, Sears struck a 50/50 joint venture deal withSimon Property, designed to unlock the real estate value in the 10 properties it will contribute to the venture. The news follows a similar deal with another mall operator, General Growth Properties, earlier this month.
Apple Watch customers will have to wait longer than expected for delivery, with Apple having pushed back shipping times to May and June after the new product saw a surge in orders. A Bank of America report estimates Apple will ship about four million Apple Watches during the June quarter.
Pandora gained after a Wall Street Journal report said rival Spotify was near a deal to raise $400 million in a round that values it at $8.4 billion.
—CNBC’s Patti Domm and Peter Schacknow contributed to this report.