NEW YORK – Stocks inched higher in a thinly traded session on Monday, which lacked few external catalysts just days before the earnings season begins in earnest.
Investors continued to expect that the U.S. Federal Reserve will bolster the economic recovery with another round of quantitative easing after Friday's weak payroll report underlined the economy's lack of progress in certain areas.
After Friday's report, "everyone understands that the Fed has its back to the wall," said Joseph Greco, managing director of Meridian Equity Partners in New York.
"The jobs report reminded the Fed that certain forces are not waiting on press releases, so I expect a statement with more aggressive language this week."
The dollar rose 0.1 percent against a basket of other major currencies (.DXY) as the Fed looked set to inject more cash into the economy. But with bets against the greenback piling up, traders were wary about pushing it lower.
The dollar and equities have traded in inverse correlation as investors leave the perceived safety of the currency to put money into equities.
The dollar was also affected after the International Monetary Fund's member countries failed to defuse currency tensions over the weekend.
Three Dow components -- Intel Corp (INTC.O), JPMorgan Chase & Co (JPM.N) and General Electric Co (GE.N) -- are scheduled to release quarterly results this week. Investors will look at revenue outlooks for insight into how corporations are faring. Bellwethers Google Inc (GOOG.O) and CSX Corp (CSX.N) are also on tap.
"I'm expecting a fairly decent earnings season, which will continue to build a base and show consistent growth. But the Fed will be the cause of greater volatility and price moves on a broader basis," Greco said..
The Dow Jones industrial average (.DJI) added 10.33 points, or 0.09 percent, to 11,016.81. The Standard & Poor's 500 Index (.SPX) gained 1.62 points, or 0.14 percent, to 1,166.77. The Nasdaq Composite Index (.IXIC) rose 6.72 points, or 0.28 percent, to 2,408.63.
Gymboree Corp (GYMB.O) surged 22.5 percent to $64.88 after it agreed to sell itself to Bain Capital, a private equity firm, for $1.8 billion, while Harbin Electric Inc (HRBN.O) soared 18.6 percent to $23.66 after its chief executive and his affiliates offered to take the company private in a deal that valued it at $745.7 million.
LDK Solar Co Ltd (LDK.N) jumped 14.6 percent to $11.23 after the Chinese solar wafer maker raised its revenue outlook and named a new chief financial officer.
Dow component Microsoft Corp (MSFT.O) edged up 0.2 percent at $24.62 after the company unveiled a new line of phones running its Windows software in an attempt to regain market share in the smartphone space.