NEW YORK (CNNmoney) - U.S. stocks surged Monday, building on gains from late last week, as investors wary of missing Wall Street's next rally snapped up technology, industrial and drug stocks.
"If you're not somewhat on the bandwagon when these stocks start to move, you are probably going to miss a rally," Nick Angilletta, head of retail sales trading at Salomon Smith Barney, told CNNfn's Halftime Report.
Sitting out the stock market since Sept. 21 was costly. The Nasdaq composite index is up 20 percent during the last month, while the Dow has gained nearly 14 percent.
The Nasdaq is now back to its levels on Sept. 10, the day before terrorist attacks led to a steep, short-lived selloff.
"The market's getting to a point where it's ignoring the bad news," Jon Burnham, CEO of Burnham Securities, told CNNfn's Street Sweep.
SBC Communications, Lexmark International, and American Express all served up bad news. And a gauge designed to forecast the economy six months ahead divined more weakness
But Burnham said the government's interest-rate and tax cuts, coupled with commitments of billions in dollars in economic aid, has investors betting on a profit rebound.
"The big unknown in this is the geopolitical situation," Burnham said.
On the bioterrorism front, the deaths of two Washington, D.C., postal workers are being investigated for the deadly anthrax bacteria. But unlike last week, anthrax had no apparent market effect Monday.
The Nasdaq gained 36.78 points, or 2.2 percent, to 1,708.09 while the Dow Jones industrial average rose 172.92, or 1.8 percent, to 9,377.03. The S&P 500 advanced 16.42 to 1,089.90.
More stocks rose than fell. On the New York Stock Exchange, advancing stocks edged declining ones 1,841 to 1,269 as 1 billion shares traded. Nasdaq winners topped losers 2,095 to 1,485 as 1.5 billion shares changed hands.
In other markets, Treasury securities edged lower. The dollar gained against the euro and yen.
3M rises, SBC falls
Bears fret that already expensive stocks only got more overpriced Monday.
But the session saw a broad advance, with Microsoft (MSFT: up $2.26 to $60.16, Research, Estimates), Intel (INTC: up $1.15 to $25.30, Research, Estimates), Merck (MRK: up $1.88 to $67.26, Research, Estimates) and Caterpillar (CAT: up $0.81 to $46.57, Research, Estimates) all rising.
The Dow's biggest gainer, 3M (MMM: up $5.22 to $107.39, Research, Estimates), said profit fell to $1.10 per share, besting forecasts by a penny. Sales fell 7 percent for the maker of Scotch Tape, Post-it Notes and other products.
EMC (EMC: up $0.68 to $12.19, Research, Estimates) shares rallied. The data storage company said Dell Computer (DELL: up $0.50 to $24.55, Research, Estimates) will market EMC's mid-range data storage line under a five-year deal.
More than 160 companies in the S&P 500 report quarterly results this week, the last busy week of the September quarter posting period. So far, profits are down 16.3 percent from the year-earlier period.
But that hasn't hurt stock prices recently. Jeffrey Applegate, market strategist at Lehman Brothers, said stocks likely bottomed Sept. 21, and should benefit from government efforts to lift the economy.
Shares of American Express rose even after the financial services company said its profit fell short.
SBC Communications (SBC: down $2.24 to $41.40, Research, Estimates) posted a profit of 59 cents a share, also missing estimates. The regional phone company said it will cut thousands of jobs. Lexmark International (LXK: down $5.58 to $44.77, Research, Estimates) cut its fourth-quarter profit target while announcing job cuts.
The biggest loser on the New York Stock Exchange was Enron (ENE: down $5.40 to $20.65, Research, Estimates). The Securities and Exchange Commission has asked Enron for information on unspecified transactions after reports last week of losses tied to a limited partnership once managed by a company executive.
Anthrax uncertainty
Last week, Wall Street posted its first losing week in a month as the rising number of anthrax cases left investors unsure about how much a fearful public will cut spending.
Uneasiness resurfaced Monday afternoon when Dr. Ivan Walks, the District of Columbia's chief health officer, labeled the recent deaths of two postal workers "suspicious."
The individuals worked at the mail facility that handled the one known D.C. anthrax finding, a letter sent to Senate Majority Leader Tom Daschle, D-S.D.
But the market held up amid the latest scares. Charles Payne, head strategist at Wall Street Strategies, said the weekend's trading break may have allowed investors to re-evaluate the threat of the disease that took the life of a Florida man earlier this month.
"We could have come to grips with the anthrax scare," said Payne, who added that the markets still faces hurdles.
In the only major economic report issued Monday, the Conference Board said its index of Leading Economic Indicators fell 0.5 percent in September. The largest drop since January matched forecasts of economists surveyed by Briefing.com.
Christine Callies, chief U.S. investment strategist at Merrill Lynch, said the market's losses in recent months likely reflect the recession that economists say is well under way.
Still, Callies cut her targets for the S&P 500. She sees the index ending the year at 1,200 and finishing 2002 at 1,450.
Though lower, those forecasts would mean the a drop of 9 percent for the S&P this year and a gain of 21 percent next year. 
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