U.S. MARKET AVERAGES

U.S. stock markets opened higher, boosted by strong earnings reports from Alcoa and Genentech, released at the beginning of the new earnings season. The news brought relief to the traders, who have been anxiously looking for signs that higher energy costs will depress corporate earnings. The early rally on Wall Street is modest but Broad. The two major averages Dow and S&P 500 post gains over 0.4%, while Nasdaq only 0.2%.

The advance in oil prices is helping energy stocks, which are bouncing back from last week's declines. The oil service space is the leader in the group, climbing by 2.2%. The Materials sector is currently up 1%, boosted by the aluminum group which stands out as one of the brightest spots on Alcoa's earnings report. Housing stocks are also strong, rising on strong quarterly sales orders from D.R. Horton.

There are few major sectors showing losses in the early going. However, the drug sector is sitting slightly below the unchanged mark.

General Motors has risen 2.6%, rebounding from yesterday's 11%-drop on Delphi's bankruptcy. IBM is the third-best Dow component, up 2.3% on a second consecutive analyst upgrade.

Genentech Inc., the world's second-biggest biotechnology company announced Q3 56% profit rise on sales of its colon cancer drug Avastin and other products.

Dow component Alcoa Inc., the world's biggest aluminum producer, saw its shares rise 2% in after-hours trading on Monday after reporting slightly higher third-quarter net income.

Gannett, media company, posted Q3 earnings decline of $1.13 a share vs. $1.16 a year ago, despite 4% revenue growth, but meeting analysts’ estimates.

Infosys Technologies, India’s second-biggest software exporter, reported Q3 36% profit increase to $137.7 million and raised its full-year earnings outlook.

Bonds were unchanged, with the yield on the 10-year Treasury note at 4.37 percent, the same as late Friday. The Treasuries market was closed Monday for the Columbus Day holiday

Inflation may come back into focus as the Federal Reserve releases minutes from its September 20 monetary policy meeting at 2 p.m.

MOVERS AND SHAKERS

The aluminum producer Alcoa (AA: chart) posted a third-quarter profit that was slightly higher than the reduced outlook it announced two weeks ago. Alcoa reported earnings of $289 million, or 33 cents a share, for the three months ended September 30, an increase from $283 million, or 32 cents, for the same period in 2004. Alcoa jumped 3.4%.

Genentech (DNA: chart) gained 5.7% after the company also reported higher-than-expected third-quarter net income. The company said net income increased 56% to $359.4 million, or 33 cents a share, in the quarter ended September, compared with $230.9 million or 21 cents a share for the same period in 2004.

Fast-food giant McDonald's (MCD: chart), a Dow component, added 2.5% after UBS lifted its price target for the stock by $6 to $43. The broker cited a spin-off of McDonald’s company-owned restaurants makes sense and would unlock shareholder value. The analysts are also optimistic on the company’s fundamental outlook heading into 2006.

Another Dow component, General Motors (GM: chart), climbed 1.2% after the company lost 10% of its value yesterday as a result of its former unit Delphi's bankruptcy filing.

Apple Computer (AAPL: chart) is going to report its earnings results after the close of trade. Analysts are expecting the company to post earnings of 37 cents a share for the quarter ended September on $3.73 billion in sales. Apple was up 1.3%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed the trading session mostly higher. The Nikkei advanced 2.5% after the long weekend, rebounding from last-week sharp declines on the back of strong bank and machinery stocks. Across the region, South Korea’s Kospi gained 1.4% on sensitive to domestic consumption stocks. Hong Kong’s Hang Seng added 0.3%, while Australia’s All Ordinaries fell 0.8%.

European markets advanced at mid-day dealings on signs of improving retail sector in the U.K. and strong earnings report from a Roche Holdings’ subsidiary Genetech. The markets shrugged off Wall Street declines overnight. The German DAX 30 added 0.7%, the French CAC 40 rose 0.7%, and London’s FTSE 100 gained 0.4%.

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