NEW YORK (CNN/Money) -
Technology gains lifted the Nasdaq Monday and kept the other major indexes from sliding. But volume was light and worries remained about interest rates and whether strong earnings are already baked into the stock markets.
The Nasdaq composite (up 24.69 to 2020.43, Charts) gained about 1.25 percent, the Standard & Poor's 500 (up 1.21 to 1135.82, Charts) index added 0.1 percent and the Dow Jones industrial average (down 14.12 to 10437.85, Charts) lost 0.1 percent.
Federal Reserve Chairman Alan Greenspan is due to speak to Congress over the next two sessions, and many Wall Streeters are hoping he will provide some clarity on when interest rates are likely to rise from their current historic lows.
There may have been some hesitation in the market Monday ahead of his comments, traders said -- although technology stocks managed to find buyers after several down sessions.
On Tuesday, Greenspan will speak before the Senate Banking Committee and will talk about the banking industry. Of greater interest to the broader stock market will be his comments Wednesday before the Joint Economic Committee, in which he is due to discuss the economy.
"Sometimes Greenspan tends to spin a web when he's talking, so I am not sure how many hints he'll give about the size and speed of interest rate hikes," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.
Schrader said that on one hand, it is unlikely the Federal Reserve would raise rates just ahead of the Presidential election, but that on the other hand, if the economy keeps heating up, the Fed may have to tighten its monetary policy.
A jump in March payrolls and consumer and producer prices recently have caused much speculation that the central bank may raise interest rates as early as August, so as to counter potential inflationary concerns. Ultimately, higher interest rates would choke off the burgeoning economic recovery. But many Fed watchers suggest the central bank won't act until it sees several months of clear signs of a pickup, as it will not want to limit the recovery before it begins rolling.
Also in focus are this week's earnings reports.
Some 179 companies in the S&P 500 are due to release first-quarter results through Friday, making it the quarter's biggest week of reporting. Earnings are expected to be positive overall, and they have been so far, but with the overhang of the Middle East and interest rate concerns, not to mention high expectations for earnings, the release of the actual earnings hasn't had much impact on stocks.
That was true of Monday's earnings, too.
Earnings due before the open Tuesday include General Motors (GM: Research, Estimates), Charles Schwab (SCH: Research, Estimates), Lucent (LU: Research, Estimates) and Pfizer (PFE: Research, Estimates). (For a look at these and other key earnings due this week, click here.)
"We're seeing some jitters about the Middle East as it relates to our presidential election," said Michael Carty, principal at New Millennium Advisors. "But I think the trend should remain up. Earnings are certainly strong, and I think the market should follow that. The only thing we have to fear is more talk about interest rates."
Monday's stock movers
Blue chips declined modestly, while select technology shares gained, boosting the Nasdaq, including Microsoft (MSFT: up $0.37 to $25.53, Research, Estimates), Cisco Systems (CSCO: up $0.38 to $22.86, Research, Estimates) and Applied Materials (AMAT: up $0.37 to $21.17, Research, Estimates), all up more than 1.5 percent.
Defense stocks again rallied on the Nasdaq in active trade, on the heels of geopolitical uncertainty and ongoing battles in Iraq. Among the movers: Dyntek (DYTK: up $0.37 to $1.84, Research, Estimates) gained more than 25 percent, IPIX (IPIX: up $1.59 to $12.64, Research, Estimates) gained more than 14 percent and Digital Record (TBUS: up $7.63 to $14.27, Research, Estimates) gained almost 115 percent.
Before the start of trading Monday, 3M (MMM: up $0.03 to $83.76, Research, Estimates) delivered earnings that rose from a year earlier and topped estimates, thanks to demand for its products and the benefits of the weak dollar. The Dow component also raised its second-quarter and full-year earnings forecast. Shares closed little changed.
Eli Lilly (LLY: up $0.95 to $73.40, Research, Estimates) also said that first-quarter sales rose sharply, beating estimates, as new drugs helped propel sales. Shares gained a little more than 1 percent.
Among the decliners, Dow component McDonald's (MCD: down $0.71 to $26.75, Research, Estimates) shed 2.6 percent amid uncertainty about the company's near-term future following the death of its chairman and chief executive, Jim Cantalupo, on Monday from a sudden heart attack. The company said chief operating officer Charlie Bell will take over the position of chief executive.
Among other movers, shares of Monolithic System Technology (MOSY: down $4.50 to $7.73, Research, Estimates), which licenses memory technology, fell nearly 37 percent in active Nasdaq trade following news that chip design software maker Synopsys (SNPS: up $0.72 to $29.40, Research, Estimates) has cancelled its plans to purchase the company for $432 million in cash and stock. No reason was given.
Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by close to two to one as 1.19 billion shares traded. On the Nasdaq, advancers beat decliners by the same margin as 1.74 billion shares changed hands.
Treasury prices dipped. The 10-year note lost 1/4 of a point, its yield rising to 4.37 percent from 4.34 percent late Friday. The dollar gained versus the yen, and fell versus the euro. After sliding for quite some time, lately the dollar has been rising.
Among commodities markets, NYMEX light sweet crude oil futures fell 24 cents to settle at $36.75 a barrel. COMEX gold lost 40 cents to settle at $401.20 an ounce.
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