NEW YORK (CNNMoney.com) -- Stocks rallied Monday, with the Dow adding 350 points after positive news about the U.S. housing market, including an upbeat profit forecast from Lowes, as well as an upgrade of Bank of America, encouraged investors to step back into the market after last week's selloff.

The Dow Jones industrial average (INDU) gained 235 points, or nearly 2.8%. The S&P 500 (SPX) index rose 3% to close above 900, bringing the average back into positive territory for the year. The Nasdaq composite (COMP) advanced 3.1%.

Stocks slumped last week after worse-than-expected reports on retail sales, housing and weekly jobless claims put investors on the defensive.

But a big rally in Indian markets helped set Monday's bullish tone early on. The buying gained momentum in afternoon trading with retail and banking shares gaining ground.

"I think we're seeing a bounce after the weakness last week," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. "For investors who think the market is going to continue higher, now might be a good time to get back in at prices that are a bit lower."

Tuesday brings readings on new home construction and building permits in April. Companies reporting quarterly results include Dow components Home Depot (HD, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500).

Housing: Lowe's (LOW, Fortune 500), the No. 2 home-improvement retailer, projected a higher fiscal second-quarter profit after posting a 22% decline in the first quarter that still managed to top analysts' forecasts. Shares rose 8%.

"The housing issue is front and center in the economic recovery," said Quincy Krosby, chief investment strategist at The Hartford. "Lowe's is a major player in that space and their comments are important."

Two private reports helped bolster confidence in the housing market. The National Association of Home Builders said its index of homebuilder confidence rose for the second month in a row. Separately, the NAHB said home prices are at their most affordable in nearly two decades.

Banking: Shares of financial services companies got a boost after Bank of America (BAC, Fortune 500) was upgraded to "buy" by Goldman Sachs (GS, Fortune 500). Analysts said the bank will be able to raise needed capital thanks to gains in mortgage and capital markets activity. BofA gained 10%.

Financial holding company State Street (STT, Fortune 500) announced a $1.45 billion stock offering and said it would also offer non-guaranteed senior notes. The company said it plans to repay its government bailout funds.

World markets: Indian stocks soared 17% after a parliamentary win by the nation's ruling party raised hopes of more political stability. Trading was halted after the surge.

Peter Cardillo, chief market economist for Avalon Partners, said signs of stabilization in India, an emerging economic powerhouse, are helping support the U.S. market.

"The prospects of more stability in India and the surge in their stock market could be beneficial to us," said Cardillo. "I think it's a stabilizing factor for the market."

Most other Asian markets fell. Stocks in Europe closed nearly 2.5% higher.

Rally or bust: A growing sense of economic optimism has lifted shares since their March 9 multi-year lows that many analysts believe represent a bear market bottom.

But the rally hit a wall last week after weaker-than-expected reports on retail sales, housing and weekly jobless claims that shook the outlook for economic growth and put investors on the defensive.

Market participants are trying to determine if last week's pullback was a temporary dip on the way up, or a sign of more weakness to come.

To that end, Krosby said investors are watching key technical levels on the S&P 500, which closed near the bottom of its recent trading range Friday. She said a close above the 900 level Monday, with a high degree of participation, would set the scene for a push higher.

"This week is very important for both bulls and bears," she said.

Bonds: Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.21% from 3.13% Friday. Treasury prices and yields move in opposite directions.

Other markets: In currency trading, the dollar rose versus the yen, but fell sharply against the euro and British pound.

U.S. light crude oil for June delivery rose $2.69 to settle at $59.03 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $9.60 to settle at $921.70 an ounce.

The national average price of a gallon of unleaded gasoline rose to $2.31, its 20th consecutive increase, according to a daily reading released by the motorist group AAA. The price of gas has increased by about 25 cents a gallon in the last three weeks, according to the Lundberg Survey. 

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a higher start Monday, but trading could be volatile with no major economic reports on tap to give investors direction.

At 6:50 a.m. ET, Dow Jones industrial average, S&P 500 and Nasdaq-100 futures were slightly higher.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

Investors have pushed stocks higher for the past two months, but the rally hit a wall last week after weaker-than-expected reports on retail sales, housing and weekly jobless claims.

No economic readings are slated for Monday. Peter Cardillo, chief market economist for Avalon Partners, said this could lead to a "choppy mixed session" on Wall Street, without strong catalysts to drive the markets up or down.

Cardillo said the strongest catalyst is coming from India, where stocks soared 17% after election results raised hopes of more political stability. Trading was halted after the surge.

"The prospects of more stability in India and the surge in their stock market could be beneficial to us," said Cardillo. "I think it's a stabilizing factor for the market."

World markets: Besides India, most other Asian markets fell. Stocks in Europe were mixed in midday trading.

Companies: Lowe's (LOW, Fortune 500) is due to report quarterly results before the start of trading. The home improvement retailer is expected to have earned 25 cents per share, down from 41 cents a year earlier.

Money, oil and gas: The dollar rose versus the euro and the yen, but slipped against the British pound.

The price of oil rose 78 cents per barrel to $57.12.

The national average price of a gallon of unleaded gasoline rose to $2.31, its 20th consecutive increase, according to a daily reading released by the motorist group AAA. The price of gas has increased about by 25 cents a gallon in the last three weeks, according to the Lundberg Survey. 

A growing sense of economic optimism has lifted shares since the March 9, multi-year lows that many market pros think represent a bear market bottom.

But last week brought more bad news than good in the form of weaker-than-expected reports on retail sales, housing and weekly jobless claims.

In addition, Chrysler said it was cutting around 25% of its dealerships and GM announced that it was cutting the first 1,100 of what is expected to be a 40% cut of its dealerships. GM remains on the brink of bankruptcy as it struggles to gain concessions from creditors and its union by the end of the month.

Investors took all the news as a collective hint that maybe Wall Street has gotten a bit ahead of itself in betting that the worst is over.

The week ahead brings uncertainty as investors sort through reports on housing, leading economic indicators, jobless claims and a slew of profit reports from retailers.

"There's a lot coming up in the week ahead to either confirm that we're recovering or rolling over and softening again," said Phil Orlando, chief equity market strategist at Federated Investors.

He said that after stocks, as represented by the S&P 500, gained more than 35% in nine weeks, the market was due for a healthy pullback. Last week may have been it, but there could be a bigger retreat brewing over the next few weeks.

Monday: Lowe's (LOW, Fortune 500) is due to report quarterly results before the start of trading. The home improvement retailer is expected to have earned 25 cents per share, versus 41 cents a year ago.

Tuesday: April reports on housing starts and building permits are due. Housing starts are expected to have risen to a 527,000 unit annual rate from a 510,000 unit annual rate in March.

Building permits, a measure of builder confidence, are expected to have risen to a 530,000 unit annual rate from a 516,000 unit annual. rate in March.

Lowe's competitor Home Depot (HD, Fortune 500) is expected to report earnings of 28 cents per share before the start of trading, down from 41 cents a year ago.

After the close, Hewlett-Packard (HPQ, Fortune 500) is expected to report a profit of 86 cents per share versus 87 cents a year ago.

Wednesday: Retailer Target (TGT, Fortune 500) is expected to report a profit of 59 cents per share, down from 74 cents a year earlier, when it releases results in the early morning.

Treasury Secretary Timothy Geithner is expected to testify before the Senate Banking Committee about the government's bank bailout plan.

The minutes from the late-April Federal Reserve policy meeting are due for release. At that meeting, the central bank opted to hold rates steady at historic lows near zero, but issued a more optimistic outlook on the economy than it had in recent weeks.

Thursday: The April index of leading economic indicators is due in the morning. LEI is expected to have rise 0.6% after falling 0.3% in the previous month.

The weekly jobless claims report from the Labor Department is due before the start of trading. The Philadelphia Fed index, a regional manufacturing report, is due after the start of trading. 

 

NEW YORK (CNNMoney.com) -- Stocks rallied Thursday, bouncing back after several down sessions as investors weighed some weaker-than-expected reports with growing economic optimism.

The Dow Jones industrial average (INDU) gained 46 points, or 0.5%. The S&P 500 (SPX) index rose 9 points, or 1%. The Nasdaq composite (COMP) gained 25 points, or 1.5%.

The S&P and Nasdaq fell for three sessions in a row and the Dow fell for two of the last three sessions as investors stepped back after the earlier spring rally.

But on Thursday, investors used the recent selloff as an opportunity to dip back into stocks, particularly technology, telecom and consumer issues.

Bets that the economy is closer to stabilizing has fueled the recent rally, lifting all three major gauges by more than 30% over 9 weeks. But a few recent reports have raised worries that investors may have gotten ahead of themselves, including Wednesday's weak retail sales report and Thursday's surprise rise in jobless claims.

"The thinking today is that we have had a couple of bad numbers, but they are not enough to derail the perspective that conditions are not as bad as they have been and are getting better," said Phil Orlando, chief equity market strategist at Federated Investors.

"The question going forward will be whether these were random reports or an indication of a reversal," he said. "There will be other disappointing reports, but I think the trend is still toward improving data."

Government reports are due in the morning on consumer prices, manufacturing, capacity utilization and industrial production and consumer sentiment.

Company news: Chrysler said it wants to close 789 dealerships, or roughly 25% of those in business, according to a plan filed in bankruptcy court.

General Motors (GM, Fortune 500) is expected to announce Friday that it will close 1,000 to 2,000 of its dealerships, according to reports.

GM said Thursday that it has agreed to accelerate payments to its parts suppliers, as it teeters closer to bankruptcy. The automaker has until the end of the month to gain enough concessions from its creditors and union to remain viable. However, GM is not expected to meet that deadline and the company's CEO has said that a bankruptcy is "probable."

Wal-Mart Stores (WMT, Fortune 500) reported higher quarterly earnings that met estimates on weaker revenue. The No. 1 retailer also forecast second-quarter earnings in a range that could surpass analysts' current forecasts. Shares fell 1.9%.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by seven to three on volume of 1.52 billion shares. On the New York Stock Exchange, advancers beat decliners by two to one on volume of 2.23 billion shares.

Economy: The number of Americans filing new claims for unemployment last week surged to 637,000 from 601,000 the previous week, the Labor Department reported. The rise in jobless claims reflects the extensive layoffs in the auto industry after Chrysler filed for bankruptcy.

Economists surveyed by Briefing.com had expected 610,000 new claims.

The Producer Price index (PPI), a measure of wholesale inflation, rose 0.3% in April after falling 1.2% in March, according to a government report released Thursday. PPI was expected to rise 0.2%.

The so-called core PPI, which strips out volatile food and energy prices, rose 0.1% in the month, as expected, after holding steady in the previous month.

Bonds: Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 3.10%, down from 3.11% Wednesday. Treasury prices and yields move in opposite directions.

Other markets: In global trading, Asian and European markets ended lower.

In currency trading, the dollar fell versus the euro and gained against the yen.

U.S. light crude oil for June delivery rose 60 cents to settle at $58.62 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery climbed $2.50 to settle at $928.40 an ounce. 

NEW YORK (CNNMoney.com) -- U.S. stocks were set to open lower Thursday, on the heels of the previous session's heavy losses.

At 7:42 a.m. ET, the Dow Jones industrial average, S&P 500 and the Nasdaq-100 futures were lower.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

U.S. stocks fell sharply Wednesday after a weaker-than-expected retail sales report reignited economic worries. The Dow lost 2% while the S&P 500 and Nasdaq both shed about 3%.

Wall Street has been correcting itself this week after having advanced in the prior two months, said Art Hogan, chief market strategist for Jefferies & Co. He said the market will continue to head lower Thursday, unless it's reversed by a positive catalyst, such as strong employment figures or earnings.

"In the absence of good news today, we might see some profit taking," said Hogan.

Earnings: Wal-Mart, the largest retailer in the world, reported diluted earnings per share of 77 cents for the first quarter of its fiscal year, slightly higher than the year-ago figure of 76 cents. The figure matched a consensus of analyst estimates compiled by Briefing.com.

Wal-Mart's (WMT, Fortune 500) stock increased slightly in pre-market trading.

Economy: Investors will be watching the government's Producer Price Index, a measure of inflation in goods and services bought by manufacturers.

The report comes out at 8:30 a.m. ET. The PPI is expected to have risen 0.2% in April, compared to the prior month's decline of 1.2%, according to a consensus of economist forecasts from Briefing.com.

Also on tap is the Labor Department's weekly reading on jobless claims.

The number of people filing for unemployment for the first time is expected to rise to 610,000 in the week ended May 9 from 601,000 the prior week, according to the Briefing.com consensus.

Companies: Several big banks have sued bond insurer MBIA (MBI) over its business split. The lawsuit alleges that the company acted illegally when it split the business in two and that the move hurt policyholders.

Sony (SNE) warned Thursday that it expects to post a loss for the fiscal year that began in April. The electronics retailer has been hit hard by falling sales and the stronger yen, which has made its exports less competitive.

World markets: Stocks in Asia retreated. Japan's Nikkei fell 2.6% and Hong Kong's Hang Seng lost 3%. European markets were lower in morning trading.

Oil and money: The price of oil fell $1.18 a barrel to $56.84. The dollar rose against major international currencies, including the euro, the yen and the British pound.