By Jessica Menton - U.S. stocks closed higher Monday, with the Nasdaq and Standard & Poor's 500 ending higher for a third straight session as investors weighed mixed earnings results from blue-chip Dow component International Business Machines Corp. and the rollout of Apple Pay. Wall Street is bracing for more volatility this week, as corporate earnings, coupled with global economic data, could result in more uncertainty Tuesday.
China, the world's third-largest economy, was set to report gross domestic product Monday at 10 p.m. EST. The country is forecast to expand 7.2 percent in the quarter ended in September compared with a year earlier, down from 7.5 percent in the previous quarter, according to Reuters data. The results come ahead of U.S. third-quarter GDP figures, scheduled for release on Oct. 30. Investors will analyze this as a gauge to see whether a slowdown in global growth is beginning to impact the U.S. economy.
“I think the key is the domestic companies in the U.S.,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “I think we may have hit somewhat of a soft patch, but I still think we’re going to see growth in the U.S. of 2.25 percent or 2.5 percent in the third-quarter.”
The CBOE Volatility Index, a measure of investor uncertainty, fell to 18.57 Monday after jumping above 30 last Wednesday, its highest level since November 2011. The index, which hovered around 15 for much of the summer, saw a huge spike last week after the financial markets went into a tailspin following a series of weak economic data (and a tumultuous Greek stock market). But the VIX managed to edge down to 22 Friday.
Notable companies reporting earnings Tuesday include soft drink-maker Coca-Cola Co., fast food chain McDonald's Corp. and telecom giant Verizon Communications Inc. ahead of the opening bell, followed by Internet corporation Yahoo! Inc. after the market closes. Investors will also be eyeing new home sales data, as the National Association of Realtors is scheduled to release U.S. existing home sales figures at 10 a.m. EST, following its report last month showing U.S. home resales fell unexpectedly in August.
In after-hours trading, shares of Apple Inc. NASDAQ:AAPL jumped more than 1 percent to $101.52 after the tech giant smashed Wall Street expectations for profits, driven by strong iPhone sales during its fiscal fourth-quarter. Shares of Texas Instruments Inc. also rose more than 1 percent to $45.74 after the closing bell as the semiconductor design company topped Wall Street earnings per share forecasts by 5 cents. Texas Instruments Inc. NASDAQ:TXN recorded a profit of $826 million, or 76 cents per share, on revenue of $3.5 billion. Although restaurant chain Chipotle Mexican Grill Inc. NYSE:CMG reported earnings of $130.8 million, or $4.15 per share, on $1.08 billion in revenue, surpassing Street expectations of $3.84 per share, the company forecast a drop in comparable restaurant sales, sending the stock down more than 4 percent to $622.15 in after-hours trading.
The Dow Jones industrial average gained 19.26 points, or 0.12 percent, on Monday to close at 16,399.67; the S&P 500 index, which gauges share prices of the largest 500 publicly traded corporations in the U.S., added 17.25 points, or 0.91 percent, to end at 1,904.01; the Nasdaq Composite climbed 57.64 points, or 1.35 percent, to finish at 4,316.07.