NEW YORK (CNN/Money) - A technology-led rally propelled stocks Monday, pushing the Nasdaq to a fresh 2-1/2 year high and also boosting the Dow and S&P 500, ahead of a slew of earnings reports due later in the week.

The Nasdaq composite (up 24.86 to 2111.78, Charts) gained 1.2 percent, the Standard & Poor's 500 (up 5.37 to 1127.23, Charts) index added 0.5 percent, while the Dow Jones industrial average (up 26.29 to 10485.18, Charts) added 0.25 percent.

The Nasdaq closed at its highest level since July 2001, while the Dow and the S&P 500 closed just below their recent multi-year highs.

The week's gains, however, are likely to be limited as investors await the release of a number of potentially market-moving earnings reports later in the week. Although Alcoa and a few others reported results last week, this week's batch are more closely-watched, analysts said.

"There's a certain amount of anticipation about earnings," said Bryan Piskorowski, a market analyst at Wachovia Securities. "The earnings focus is likely to be tech and Intel for the next few sessions, and then Thursday and Friday, it's all about the banks."

Monday and Tuesday don't offer much in the way of influential companies' results, but Wednesday brings earnings from Delta Air Lines (DAL: Research, Estimates), Apple (AAPL: Research, Estimates), Intel (INTC: Research, Estimates) and Yahoo! (YHOO: Research, Estimates).

On Thursday, Sun Microsystems (SUNW: Research, Estimates) reports, as well as a number of banks, including Bank of America (BAC: Research, Estimates). General Electric (GE: Research, Estimates) is due Friday.

"The fourth-quarter earnings are expected to show growth from a year ago, and there have been very few pre-announcements one way or the other, which is positive," said Timothy Ghriskey, president of Ghriskey Capital Partners. "But it's not unusual to see this kind of choppiness as traders maneuver around and decide what they want to be in ahead of the earnings."

Certain technology stocks could get a lift early Tuesday after data storage maker Storage Tech (STK: up $0.13 to $27.80, Research, Estimates) said after-the-bell Monday that its fourth-quarter earnings and revenue will top previous expectations. Shares rose 15 percent in extended-hours trading.

Tuesday's economic news consists of reports on import and export prices. However, the data doesn't usually influence stocks. Of greater interest will be reports due later in the week on producer prices, consumer prices, manufacturing, retail sales, and consumer sentiment, among others.

The market declined Friday following weaker-than-expected December job growth. Despite the selloff, stocks still managed to end last week with gains -- which some forecasters saw as a good sign, citing the pattern that the first week of January sometimes determines how the market will perform all year.

"The big picture here is that we're pretty quiet," Piskorowski added. "We are in the seasonally strongest month of the year, so that supports us, but the fact that everyone's so bullish is a bit worrisome."

Once again, technology performed better than the broader market. On the Nasdaq, Sun Microsystems (SUNW: up $0.14 to $5.45, Research, Estimates), Oracle (ORCL: Research, Estimates) and JDS Uniphase (JDSU: up $0.13 to $4.45, Research, Estimates) led the advance.

Chips were higher, following a broadly bullish look at the sector from research firm Sanford Bernstein, in which the firm cited historic data that suggested that the run in chip stocks could still continue.

In addition, Broadcom (BRCM: up $4.23 to $41.01, Research, Estimates) rose more than 11 percent after CIBC World Markets said it was increasingly optimistic about the company's earnings during the current quarter, the first quarter. The firm also reiterated its "sector outperformer" going into the fourth-quarter earnings.

Dendreon (DNDN: up $2.32 to $11.44, Research, Estimates) gained 25.4 percent in active Nasdaq trading after the company said its experimental treatment for prostate cancer prolonged survival time by 89 percent for patients with less aggressive forms of the disease.

On the downside, Merck (MRK: down $1.23 to $45.90, Research, Estimates) lost 2.6 percent after Credit Suisse First Boston downgraded the Dow component to "underperform" from "neutral," saying 2004 guidance has been overly ambitious.

Meanwhile CSFB upgraded rival Bristol-Myers Squibb (BMY: up $0.52 to $29.53, Research, Estimates) to "neutral" from "underperform," citing a number of drugs in the company's pipeline. The news sent the shares 1.8 percent higher.

Shares of Alcoa (AA: down $1.28 to $35.97, Research, Estimates) fell 3.4 percent after Prudential downgraded the aluminum maker to "underweight" from "neutral."

Computer Associates (CA: down $0.13 to $27.99, Research, Estimates) was little changed after saying it could face civil charges from the Securities and Exchange Commission regarding its accounting practices in 2000.

Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by five to three as about 1.45 billion shares changed hands. On the Nasdaq, winners beat losers by nearly 2 to 1 as 2.24 billion shares changed hands.

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Treasury prices were flat to lower, with the 10-year note yield at 4.09 percent, down from 4.08 percent late Friday. Bond prices and yields move in opposite directions.

The dollar turned higher against the euro after hitting a new low this morning, and built on earlier gains versus the yen.

In commodities markets, NYMEX light crude oil futures gained 41 cents to settle at $34.72 a barrel. COMEX gold fell 20 cents to settle at $426.60 an ounce.

European markets closed mostly lower, while Asian stocks ended mixed.