NEW YORK (Reuters) - Stocks rose on Monday, as optimism about earnings and M&A activity in the industrial sector countered the worries about worsening credit conditions that led to a global equity sell-off last week.
Expectations for quarterly earnings growth by Standard & Poor's 500 companies were raised to 6.8 percent compared with the year-ago period from 6.0 percent one week earlier, according to Reuters Estimates.
Shares of industrial companies gained after Ingersoll-Rand Co. Ltd. (IR.N: Quote, Profile, Research) said it planned to sell its Bobcat machinery business and two other units to South Korea's Doosan Infracore.
Ingersoll-Rand shares rose 6.6 percent to $51.37, while the S&P industrials index (.GSPI: Quote, Profile, Research) rose 1.4 percent.
But that deal aside, there was a lack of the typical flurry of takeover and buyout announcements seen on many Mondays this past year. Tightening lending standards are threatening to slow or halt the pace of corporate buyouts, including several by private equity firms, which have fueled a rally in stocks.
"The market is getting a bounce back. It was definitely oversold. It is also good to get some greed in there because we've had a lot of fear," said Manny Weintraub, managing director at Integre Advisors in New York.
"But I don't think we have the conditions for a permanent floor and the resumption of a bull market here."
The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 90.72 points, or 0.68 percent, at 13,356.19. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was up 12.89 points, or 0.88 percent, at 1,471.84. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 19.63 points, or 0.77 percent, at 2,581.87.
In earnings news, Tyson Foods Inc. (TSN.N: Quote, Profile, Research), the world's largest meat producer, rose 1.8 percent to $21.83 after it reported a higher-than-expected quarterly profit on Monday due to higher beef, chicken and pork prices.
Dow component Verizon Communications Inc. (VZ.N: Quote, Profile, Research) reported higher earnings that met Wall Street's estimates. Shares of Verizon, the No. 2 U.S. phone company, fell 1.7 percent to $41.29 on the New York Stock Exchange.
Rising delinquencies and defaults in home loans and falling home prices contributed to stocks' recent losses.
In a sign of the housing downturn, trading in American Home Mortgage Investment Corp. (AHM.N: Quote, Profile, Research) was halted on the New York Stock Exchange after its shares plunged in electronic trading before the market opened. The mortgage lender said its banks demanded more margin after it wrote down the value of its mortgage and security portfolios.
American Home Mortgage had plunged 39 percent before the opening bell to $6.39.
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