NEW YORK (CNNMoney.com) -- The Dow ended higher and the broader market meandered Monday, as investors geared up for the start of the quarterly reporting period, following the biggest week of stock gains in a year.
Stocks slumped in the morning, turned mixed in the afternoon, before ending little changed, with just the blue chips in the plus column. Microsoft, Intel and select tech shares managed gains, but the stronger dollar dragged on commodity prices and the underlying shares.
Last week, all three major indexes added more than 5% as investors dug back in on anticipation of a strong corporate reporting period following a two-month selloff. Whether the gains were just a bounce after the battering or a new move higher will largely be dependent on what companies have to say in the next few weeks.
"The market tends to move up going into earnings," said Phil Dow, director of equity research at RBC Wealth Management. "But the key is the forward guidance."
Second-quarter profits will likely top forecasts, with Thomson Reuters forecasting a 27% rise from a year earlier. But guidance will be at the forefront of investors' minds, and Dow noted that companies will hardly be willing to go out on a limb considering the questions still surrounding the economic recovery and the impact of the European debt crisis.
After the close, Dow component Alcoa (AA, Fortune 500) reported quarterly earnings of 13 cents per share, beating expectations by a penny and showing a big improvement from a year ago when the aluminum producer posted a quarterly loss. Alcoa also reported higher sales versus a year ago that topped forecasts.
The company also boosted its forecast for aluminum demand to 12% from 10% for 2010. Shares gained 3% after the close.
Four other Dow names report this week: Intel (INTC, Fortune 500) on Tuesday, JPMorgan Chase (JPM, Fortune 500) on Thursday and General Electric (GE, Fortune 500) and Bank of America (BAC, Fortune 500) on Friday.
BP: BP is closer to containing the Gulf of Mexico spill and is also reportedly in talks to sell itself or at least some of its assets.
BP (BP) shares jumped 8% after multiple published reports said U.S. oil behemoths Exxon Mobil (XOM, Fortune 500) and another big firm, likely Chevron (CVX, Fortune 500), have sought government approval to make a bid for U.K.-based BP that could be worth $150 billion.
Separately, reports said that a deal with Houston-based Apache could be in the works to sell its stake in the Prudhoe Bay project in Alaska for as much as $10 billion.
In addition, the company said it has made progress with the latest capping system and that the relief well it is drilling should be usable by mid-August, in line with earlier projections.
Company news: Insurance brokerage Aon Corporation (AON, Fortune 500) is set to buy outsourcing company Hewitt Associates (HEW) in a $4.9 billion cash-and-stock deal. Shares of Hewitt jumped 32%, while Aon shares lost 7%.
Weyerhaeuser (WY, Fortune 500) shares jumped 8.3% after the wood products company said it will pay a special dividend of $5.6 billion - a step required as it transitions into becoming a real estate investment trust.
Wall Street reform: Congress plans to resume its work on financial reform this week after it took a summer recess on July 2. A key Republican senator, Scott Brown, R-Mass, announced his support for the Wall Street reform bill on Monday, placing Senate Democrats within one vote of getting around a filibuster and passing the bill.
The final bill includes measures to strengthen consumer protection, shine a light on complex financial products, create a new process for closing so-called "too big to fail" firms, and making them stronger to prevent such failure.
World markets: European markets gained, with Britain's FTSE 100 rising 0.7%, Germany's DAX advancing 0.2% and France's CAC 40 climbing 0.3%.
Asian markets ended mixed. Japan's Nikkei fell 0.4%, Hong Kong's Hang Seng gained 0.4% and the Shanghai Composite rose 0.8%.
Currencies: The euro fell versus the dollar, while the U.S. currency fell versus the Japanese yen.
Commodities: U.S. light crude oil for August delivery fell $1.24 to $74.84 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery lost $10 to $1,199.80 an ounce.
Market breadth: Breadth was negative and volume was fairly light. On the New York Stock Exchange, losers beat winners by about 2 to 1 on volume of 855 million shares. On the Nasdaq, decliners topped advancers by more than 2 to 1 on volume of 1.78 billion shares.
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