NEW YORK (CNN/Money) -
Buying of selected blue chips gave U.S. stocks a lift early Monday ahead of a widely awaited manufacturing report, while sluggish earnings restrained the tech sector.
The Columbia shuttle tragedy did not seem to have much impact on market action, although some companies in the aerospace and defense defense got knocked lower. The New York Stock Exchange will observe 2 minutes of silence at 11 a.m. ET to pay respect to the memories of the seven astronauts who were killed Saturday.
At about 9:45 a.m. ET, the Nasdaq composite (up 1.51 to 1322.42, Charts), Dow Jones industrial average (up 37.71 to 8091.52, Charts) and the Standard & Poor's 500 index (up 3.23 to 858.93, Charts) all rose modestly.
Gains in some of the harder-hit technology shares, particularly the chips, fostered the early gains, with Rambus (RMBS: up $0.50 to $16.00, Research, Estimates) showing the strongest gains. A Lehman Bros. upgrade of sector mate R.F. Micro Devices (RFMD: up $0.39 to $6.01, Research, Estimates) also gave a lift to that stock. But weakness in the telecom sector after Ericsson's (ERICY: down $0.75 to $7.38, Research, Estimates) weak quarterly earnings report and forecast restrained the tech sector.
Investors were also focused on the Institute for Supply Management's January manufacturing index, due out at 10 a.m. ET. The ISM index probably fell to 53.0 from 55.2 the prior month, according to economists surveyed by Briefing.com. A reading above 50 points to growth in manufacturing.
Also impacting trading, the Bush administration introduced its 2004 budget, which showed large projected deficits for this year and fiscal 2004, which starts Oct. 1.
Talk that there may an oversupply of oil in the second quarter pushed oil futures down, with Brent crude for March delivery losing 42 cents to $30.68. OPEC has covered the production lost from the Venezuelan strike and has not yet to announce a slowdown in production.
The decline in oil prices and the slide in bond prices are positives for stocks, as they often coincide with investors taking money out of commodities and putting it into equities.
Also helping stock action: the dollar rose versus the euro and the yen, as war fears got pushed a bit into the background. In an opinion piece in the Wall Street Journal, Secretary of State Colin Powell said that the U.S. will not back down. On Wednesday, he is scheduled to present Washington's case before the United Nations Security Council. Meanwhile U.N. weapons inspectors have accepted Iraqi officials' offer to return to Baghdad Feb. 8 for more talks.
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