NEW YORK -- U.S. blue-chip stocks edged higher on Monday, led by gains in retailers, raw materials producers, and manufacturers, on hopes the Federal Reserve will not raise interest rates again this year.
Aluminum giant Alcoa Inc. rose after reporting strong earnings.
Technology issues, including leading computer, semiconductor and software companies, suffered as money was switched into more traditional "old economy" areas.
The blue-chip Dow Jones industrial average finished up 10.60 points, or 0.10 percent, at 10,646.58, well off its intraday high of 10,703.15. The technology-dominated Nasdaq Composite Index dropped 42.88 points, or 1.07 percent, to 3,980.32.
The June employment report on Friday, which suggested the U.S. economy was slowing, heightened expectations the inflation-fighting Fed would hold its fire at the next policy-setting meeting on Aug. 22. Still, weaker economic growth is a double-edged sword as it is also likely to crimp corporate profits.
"The jobs data raised hopes the Federal Reserve might not need to raise interest rates again this year," said Alan Ackerman, senior vice president and market strategist at Fahnestock and Co. "Market strategists are trying to gauge the effect of a slowing economy on corporate earnings."
The quarterly earnings reporting season started Monday with the world's largest aluminum producer Alcoa (AA) gaining 1-7/8 to 29-1/2 after its second-quarter profits rose a better-than-expected 57 percent, due to cost cutting and continued strong demand for aluminum products.
Among the traditional manufacturers, auto giant General Motors (GM), rose 2-1/8 to 62-3/8, and home improvements giant Home Depot (HD), which up 2-7/16 at 57-11/16.
Sears, Roebuck and Co. rose 7/8 to 36-1/4 after its second-quarter profits exceeded Wall Street estimates.
"The retail sector had been pretty hard hit because everybody thought the Federal Reserve was going to bring the economy to a screeching stop," said Michelle Clayman, of New Amsterdam Partners, in New York. "We certainly have seen signs of a slowdown but the consumer confidence numbers are fairly solid."
Also pressuring the Nasdaq composite was JDS Uniphase (JDSU), which fell 15-1/16 to 101-1/8 after the fiber-optic equipment maker said it would buy SDL Inc. for $41 billion. SDL (SDLI) gained 25-3/8 to 320-11/16.
"JDS is putting a little pressure on the Nasdaq," said Bill Meehan, chief market analyst at Cantor Fitzgerald.
Scant economic news is due this week until Friday, when Wall Street will get a reading on inflation at the wholesale level in June with the Producer Price Index. The market also will eyeball a report Friday on retail sales in June, as well as on industrial production and capacity utilization.
