Traders await earnings reports

NEW YORK (AP) — Stocks ended mostly higher Monday ahead of a flurry of earnings reports that could determine whether the economy is really getting better, as investors have been hoping over the past month as they drove the market higher.

Early signs were good. Goldman Sachs Group Inc. surprised investors after the end of trading Monday when it released better-than-expected quarterly results and announced a $5 billion stock offering. The company had been scheduled to report early today.

The bank’s $1.7 billion profit was just the sort of good surprise traders were waiting for Monday as they snapped up financial stocks. Some traders are looking for signs of recovery, and others don’t want to get burned if banks beat the low expectations the market has set for the industry.

The buying helped the Dow Jones industrial average turn a 120-point deficit into a modest drop of 26 points by the time the closing bell sounded. Broader indexes managed to post gains. Trading volume was light, which can skew the market’s moves.

The bouts of selling after a long holiday weekend were orderly and suggested that traders were reluctant to give up on a five-week rally. The earnings reports and economic figures due this week could reignite buying if they beat Wall Street’s modest expectations.

Beyond banks, industrial stocks ended mixed after Boeing Co. and Chevron Corp. said the weak economy was hurting their results.

The market was unsettled by a New York Times report saying the Treasury has directed General Motors Corp. to lay the groundwork for a potential bankruptcy filing by June 1. GM might be forced to file if it cannot complete a plan to exchange debt for equity, according to the report.

According to preliminary calculations, the Dow fell 25.57, or 0.3 percent, to 8,057.81.

Broader stock indicators advanced. The Standard & Poor’s 500 index rose 2.17, or 0.3 percent, to 858.73, and the Nasdaq composite index rose 0.77, or 0.1 percent, to 1,653.31.

Boeing fell 5 percent as analysts cut their ratings and estimates for the aircraft maker after it said it would reduce production of some jetliners due next year. Chevron lost 1.8 percent after saying first-quarter earnings will be sharply lower due to falling oil and natural-gas prices.

Investors are also looking to a spate of earnings results throughout the week, including reports from JPMorgan Chase & Co. and Citigroup Inc. Financial companies had been among the hardest hit by the economic downturn and credit crisis, but they have also helped lead a rally over the past month.