Stocks rally on robust IBM results

Associated Press

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NEW YORK -- Wall Street advanced sharply Monday, with solid preliminary results from IBM encouraging investors to buy back into the stock market after last week's rout.

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International Business Machines Corp., one of the 30 Dow Jones industrials, released preliminary earnings estimates for the fourth quarter that were 24 percent above year-earlier levels. The results also beat the forecast of analysts surveyed by Thomson Financial.

After falling nearly 250 points on Friday, the Dow rose more than 100 points Monday.

"The market was pretty oversold," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "We were due to bounce back, and the IBM news didn't hurt."

The badly beaten financial sector will remain under a microscope, however, after reports over the past week that Citigroup Inc. may have to take a larger-than-feared writedown; the bank's earnings report is due Tuesday.

Elsewhere in the sector, Merrill Lynch & Co. Inc. is seeking $4 billion, in a second capital raising to stanch the losses on its balance sheet, according to the Financial Times. The Kuwait Investment Authority could invest as much as $3 billion in the deal, which could be announced by the middle of the week.

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