Moving the Market

Dow +130.43 at 12876.31, Nasdaq +42.97 at 2488.49, S&P +15.30 at 1403.58

[BRIEFING.COM] The stock market rallied more than 1% on Monday as investors were encouraged that the market held up to an earnings warning from FedEx (FDX 90.50, +0.13) and a substantial loss at a major bond insurer. However, volume was light so it remains to be seen how concerted this upward move will be.

Stocks got off to a sluggish start after FedEx warned that its profit will fall short of its previous estimate. Also weighing on stocks was news that bond insurer MBIA (MBI 9.85, +0.42) lost a whopping $2.4 billion, or $14.03 per share.

The negative sentiment, however, was short-lived as shares of MBIA rebounded into positive territory shortly after the open as the company reassured investors it has plenty of liquidity. Meanwhile, FedEx managed to bounce to the unchanged mark after being down as much as 3.1%.

The reversal of the two stocks helped lift overall sentiment. In the end, nine of the ten economic sectors posted a gain.

The consumer discretionary sector posted the largest advance of 2.1%. The sector benefited from a 9.6% spike in shares of Clear Channel (CCU 32.87, +2.87) on word it was negotiating a settlement over its lawsuit against several banks that backed out of their commitment to fund Clear Channel's private equity buyout.

A strong showing by retailers also gave the discretionary sector a boost. Wal-Mart (WMT 58.02, +0.84) posted a solid advance ahead of its earnings report on Tuesday. According to Bloomberg.com, Citigroup raised its price target for Wal-Mart to $67 from $57.

The tech sector was active, and modestly outperformed the broader market with a 1.3% gain. Apple (AAPL 188.16, +4.71) saw a boost after its price target was raised at Amtech and BMO Capital. The stock also benefited from reports that the iPhone is sold out at Apple.com, fueling speculation that a new iPhone may soon be released.

IT services company EDS (EDS 24.13, +5.27) spiked on word that Hewlett-Packard (HPQ 46.64, -2.49) is close to a deal to acquire EDS. The Wall Street Journal reported the purchase price will range from $12 billion to $13 billion, roughly a 30% premium.

Research In Motion (RIM 141.97, +9.20) posted a hefty 7% gain. Traders liked what they heard at RIM's analyst meeting, including details of the company's new BlackBerry Bold smartphone.

Financials (+1.7%) provided leadership. Advances in Bank of America (BAC 37.44, +0.79) and JPMorgan Chase (JPM 47.24, +0.67) helped offset weakness in AIG (AIG 38.37, -1.91).

The energy sector underperformed on a relative basis, with a modest 0.2% decline. Crude prices fell 1.6% to $123.91 per barrel, which weighed on the sector. However, the drop in crude prices helped ease some fears, considering crude closed at an all-time high in each of the five previous sessions.

..Nasdaq 100 +1.9%. ..S&P Midcap 400 +1.8%. ..Russell 2000 +1.2%.
 

The top-performing and worst-performing S&P 500 industry groups for Monday: