NEW YORK - US stocks moved broadly higher early Monday after telecom giant SBC led a raft of solid earnings reports, with a strong report on home sales and a big energy sector merger lending further support.
The Dow Jones Industrial Average climbed 77.37 points (0.76 percent) to 10,235.08 and the Nasdaq composite advanced 15.18 points (0.79 percent) to 1,947.37 at 1525 GMT.
The Standard and Poor's 500 broad-market index increased 8.83 points (0.77 percent) to 1,160.95.
SBC's 885 million dollar profit and news of Valero buying rival refiner Premcor for 8.0 billion dollars lifted sentiment at the opening.
In a sign of a still-strong housing sector, the National Association of Realtors reported US existing home sales climbed 1.0 percent in March to their third highest pace on record.
Stocks were building on modest gains posted last week despite sharp swings in both directions as traders mulled the prospects of higher inflation and a possible economic slowdown.
Tobias Levkovich at Smith Barney said the selling may have been exhausted in recent weeks, with a strong chance of a mid-year rally developing.
"We recognize that the investment community has gotten itself into what is best described as a 'funk,' in which dour sentiment is transferred from one issue to the next," he said.
"Once investors move beyond the current scapegoats, the real question is whether a catalyst can be found that will move markets higher or will a new worry emerge ... We are continuing to position ourselves for a coming rally."
Bob Dickey at RBC Dain Rauscher agreed that sentiment may be turning after a rocky period for Wall Street.
"The volatility of the past two weeks has been dramatic, keeping both the bulls and bears uncertain as to what may be developing," he said. "We regard this choppy action as a sign of a direction change from the correcting trend of the previous six weeks ... the market may have reached that point where prices are more attractive."
Among active shares, SBC rose 23 cents to 23.45 after the telecom giant reported earnings that topped expectations.
Another Dow component, Boeing lifted 1.37 to 59.25 after announcing an order worth up to six billion dollars for new aircraft from Air Canada, and a smaller order from Panama's Copa Airline.
In the energy sector, Valero surged 1.74 to 76.78 after it announced plans to buy rival refiner Premcor for about eight billion dollars, making it the largest crude-oil refiner in North America. Premcor jumped 12.25 or more than 20 percent to 71.25 on the news.
Elsewhere, Qwest fell two cents to 3.53 after getting a positive response to its "final" merger offer of 9.7 billion dollars for rival telecom firm MCI, up a penny at 26.70. Verizon, which had struck a deal to buy MCI for 7.6 billion dollars, rose 16 cents to 34.22.
Paper products maker Kimberly-Clark advanced 10 cents to 63.63 after the make of Kleenex reported a two percent drop in net earnings but record revenues for the latest quarter.
The bond market was little changed. The yield on the 10-year US Treasury bond edged up to 4.257 percent from 4.255 percent Friday while that on the 30-year bond drifted down to 4.563 percent against 4.564 percent.
04/25/2005 15:47 GMT