IBM pushes stocks higher

NEW YORK (CNNMoney.com) -- Stocks opened higher Monday morning after International Business Machines said fourth-quarter earnings will be higher-than-expected.

The Dow Jones industrial average (INDU) rose 0.7 percent in the early going. The broader S&P 500 (INX) index was up 0.4 and the Nasdaq (COMPX) composite climbed 0.8 percent.

Stocks tanked Friday after a profit warning from American Express (AXP, Fortune 500) and reports that Merrill Lynch (MER, Fortune 500) will writedown an additional $15 billion in subprime-related debt, exacerbated recession fears.

Increasing talk of an economic recession has many on Wall Street betting that the Federal Reserve will cut rates by at least a half-percentage point at the end of its two-day meeting scheduled for Jan. 30.

In corporate news, shares of the blue chip technology company IBM (IBM, Fortune 500) opened more than 8 percent higher after the company said it expects fourth-quarter earnings of $2.80 a share, compared to analysts expectations of $2.60 a share.

On the down side, department store operator Sears Holdings Corp., (SHLD, Fortune 500) warned Monday that it expects fourth-quarter earnings to be weaker-than-expected due to slow same-store sales growth.

The financial sector is looking down the barrel of more writedowns this week.

Citigroup, the world's largest bank, is expected to to take a giant writedown when it reports results Tuesday. Citi got more bad news Monday morning when

Plans by Citigroup to raise capital by selling a $2 billion stake to China Development Bank also faced opposition from Chinese government officials over the weekend, The Wall Street Journal reported, but it is not clear if the deal has been derailed altogether.

Treasury prices held steady, with the yield on the 10-year note at 3.80 percent, unchanged from 3.80 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the yen and the euro.

U.S. light crude oil for February delivery rose $1.45 to $94.14 a barrel on the New York Mercantile Exchange.

COMEX gold for February delivery spiked $9.20 to $906.90 an ounce, an all-time record high.