NEW YORK (CNN/Money) - U.S. stocks edged higher Monday as investors bracing for a decision on interest rates and a blitz of corporate and economic news avoided any big bets on the market.
A raft of brokerage upgrades lifted individual stocks but a report showing continued strength in new home sales failed to rally the market.
Continuing a trend of indecisiveness, the major indexes opened higher, and fell by mid-session before ending with an upswing. Stocks have gone nowhere this month amid worries a year-end 2001 rally overshot prospects for a profits recovery.
"We are in an environment again where people are waiting to see what the earnings are," Nick Angilletta, trader at Salomon Smith Barney, told CNNfn's Halftime Report.
Some 70 firms in the Standard & Poor's index of large companies are set to release December quarter results in the days ahead. Also due are more than ten economic reports and the two-day meeting of Federal Reserve policy makers to set interest rates.
The Dow industrials rose 25.67 points, or 0.26 percent, to 9,865.75. Its fourth straight advance narrowed the Dow's 2002 losses to 1.5 percent. The Nasdaq composite index gained 6.21, or 0.3 percent, to 1,943.91 and is down 0.3 percent on the year. The S&P index slipped 0.22 to 1,133.06.
More stocks rose than fell. On the New York Stock Exchange, advancing stocks topped declining ones nearly 8-to-7 as 1.1 billion shares changed hands. Nasdaq winners topped losers 9-to-8 as 1.4 billion shares traded.
In other markets, the dollar rose against the euro and slipped versus the yen. Treasury securities fell.
Financials fall
In the first of seven Dow components releasing earnings this week, American Express (AXP: down $0.70 to $36.29, Research, Estimates) reported a fourth-quarter profit that fell more than 50 percent from year-ago figures and missed Wall Street estimates.
Losses spread to J.P. Morgan Chase (JPM: down $0.68 to $34.31, Research, Estimates), whose profits fell short earlier this month, and Citigroup (C: down $0.31 to $49.31, Research, Estimates).
Fiber-optic network operator Global Crossing (GX: Research, Estimates) joined retailer Kmart (KM: up $0.07 to $0.92, Research, Estimates) and energy trader Enron in filing for bankruptcy court protection, but vowed to continue normal operations without layoffs.
The NYSE's second-most actively traded stock, Ford (F: up $0.55 to $15.06, Research, Estimates), had its shares upgraded to "outperform" from "neutral" by Morgan Stanley, which made an identical upgrade to rival automaker General Motors (GM: up $1.86 to $50.34, Research, Estimates).
Cisco Systems (CSCO: up $0.57 to $19.70, Research, Estimates), Nasdaq's most active issue, may post a quarterly profit Feb. 6 above consensus forecasts, according to Credit Suisse First Boston.
Credit Suisse First Boston raised its rating on Texas Instruments (TXN: up $0.95 to $28.40, Research, Estimates) to "buy" from "hold" ahead of its quarterly results, which are due after the close of trading.
Federated Department Stores (FD: up $0.80 to $41.20, Research, Estimates), which runs Macy's and Bloomingdale's, enjoyed an upgrade from Morgan Stanley.
Monday's upgrades, totaling at least 22, come during a quarter when overall profits are expected to post their fifth-straight quarterly decline. That hasn't happened since 1970.
Richard Bernstein, chief U.S. investment strategist at Merrill Lynch, said that with the stock market expensive, investors should expect below-average returns of 5 percent to 6 percent during the next several years.
"S&P 500 valuations, by some measures, are near or at all-time highs," Bernstein said in a note to clients Monday.
The pace of profit and sales warnings has slowed in recent months while the rate of upside surprises has risen, presaging a possible return to profit growth by this spring.
"I think the worst of the confession season is over," Joe Kalinowski, equity strategist at Thomson Financial, told CNNfn's Before Hours.
But with the Nasdaq up more than 36 percent since Sept 21 and the Dow industrials clinging to a 19.5 percent gain, some of that rebound may be built into the market.
Defying expectations for a quarterly loss, Xerox (XRX: up $1.34 to $11.24, Research, Estimates) said it posted a profit in the fourth quarter. Looking ahead, the copier maker said it expects to meet estimates for the current quarter.
Palm (PALM: up $0.25 to $4.15, Research, Estimates) unveiled a handheld computing device Monday that combines e-mail, Web browsing and instant messaging.
Fed on the brain
Federal Reserve policy makers Wednesday are expected to leave interest rates unchanged, a sign that last year's 11 rate cuts may be stanching the economy's decline.
Bond investors have been selling fixed-income securities this year, sending yields higher, in a bet that policy makers will be raising rates in the months ahead to keep a rebounding economy from generating inflation.
But the stock market is more cautious about the strength of any recovery. Despite snapping a two-week losing streak last week, the major indexes are lower in 2002 following two consecutive annual declines.
A government report issued Monday showed that new home sales rose 5.7 percent in December, surprising economists expecting a decline. For 2001, sales of new homes set a record as consumers encouraged by lower interest rates locked in potential savings.
The days ahead bring other data on the job market, consumer confidence, manufacturing and fourth-quarter gross domestic product.
On Tuesday, President Bush delivers his State of the Union address to Congress. And later this week, hundreds of world leaders, academics and corporate executives gather in New York for the World Economic Forum. 
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