NEW YORK — Investors are seeing the kind of earnings numbers that make them feel confident about stocks.
The market stepped to new highs for the year Monday after a handful of earnings reports bolstered hopes that the economy is coming back sooner than many analysts had thought.
That is helping some investors move past a bout of nerves about whether expectations for the economy are stretched too far. The Dow Jones industrial average rose 96 points, while the Standard & Poor’s 500 index advanced but ended just shy of 1,100, having topped that level during the day.
Industrial-equipment maker Eaton said it was seeing improvement in key markets and raised its full-year profit forecast. Newspaper publisher Gannett managed to post a profit despite a sharp fall in revenue.
The day’s gains came ahead of quarterly earnings released after the closing bell from Apple and Texas Instruments. Both wound up beating forecasts. Apple blew past expectations because of increased sales of the iPhone, while Texas Instruments’ profit and sales came in above the improved forecast that the chipmaker issued last month. Share of both tech companies gained in after-hours trading.
The reports are adding to investors’ expectations for the technology industry. Last week, Google and chipmaker Intel posted solid earnings. Many tech companies have strong balance sheets and large amounts of cash that have enabled them to weather the recession better than companies in other industries.
The Dow rose 96.28, or 1 percent, to 10,092.19. The broader S&P 500 rose 10.23, or 0.9 percent, to 1,097.91. For both indexes, it was the highest close since Oct. 3, 2008. The Nasdaq composite rose 19.52, or 0.9 percent, to 2,176.32, its highest close since Sept. 26, 2008.
The day’s advance came on the 22nd anniversary of the 1987 stock-market crash known as “Black Monday,” which saw the Dow plunge a record 22.6 percent on worries about interest rates and slowing economic growth.
Bob Jergovic, chief investment officer at CLS Investments in Omaha, said investors are trying to determine whether a recovery in corporate profits will continue and, if so, whether that will help the overall economy if companies are more willing to hire and make investments.
“We’re in that phase where the market has real ly got to sort it out,” he said. “Can we make that handoff from a profit recovery to an economic recovery?”
