U.S. stocks opened higher on Monday, extending gains from last week’s rally to highs, as investors took a positive view on earnings reports ahead of the Federal Reserve meeting this week.
“It appears that as if a lot of the bad news is now incorporated,” said Maris Ogg, president of Tower Bridge Advisors. “Most of the big issues that are causing earnings shortfalls and revenue shortfalls are being taken in stride. This probably is the pivotal week to see. I think we adjust ourselves to higher valuations.”
The S&P 500 and Nasdaq closed at records on Friday. The S&P held above its previous intraday high in early trade on Monday.
The Fed are meeting on Tuesday and Wednesday this week, with the conclusion and post-meeting statement due Wednesday.
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The recent string of weak data and first-quarter growth expected at around 1 percent has convinced many in the markets that the Fed will not raise interest rates until September at the earliest.
“The post-meeting statement might well take a slightly more dovish tone than of late, further supporting our view that the first rate hike will take place no sooner than September,” said Chris Scicluna, executive director and head of economic research, at Daiwa Capital Markets Europe.
“You may see some muted trading wit the Fed meeting this week,” said JJ Kinahan, chief strategist at TD Ameritrade, noting a trend of little action for the week until the release of the Fed statement.
Major earnings on Monday include Canon and Restaurant Brands before market open,
Restaurant Brands International, the parent of Burger King and Tim Hortons, reported that first-quarter revenue more than doubled compared with the fourth quarter of 2014, helped by product launches and promotions.
Investor focus will be on Apple fiscal second-quarter results due after the bell.
The Street expects the Cupertino, California-based powerhouse to deliver earnings of $2.16 per share on revenue of $56.06 billion, according to analysts’ estimates from Thomson Reuters. That’s a 30 percent and 23 percent increase year over year, respectively.
And while Wall Street will be watching iPhone sales, investors will also be listening for an update on Apple’s capital return program.
The Dow Jones Industrial Average opened up 85 points, or 0.47 percent, at 18,164.
The S&P 500 opened up 6 points, or 0.29 percent, at 2,123.
The Nasdaq opened up 14 points, or 0.27 percent, at 5,105.
In Europe, equities turned higher on improved sentiment on Greece.
Shares of Deutsche Bank slipped 5 percent after the bank announced an overhaul of its banking operations on Monday.
Greece was also told at the weekend meeting in Latvia that it would not receive any more aid until it agrees an economic reform plan.
—Reuters and CNBC’s Cadie Thompson contributed to this report.
On tap this week:
Earnings: Apple, Tenneco, Restaurant Brands Intl, Crane, United Health Services, AvalonBay, General Growth Properties, Hartford Financial, PartnerRe, The Container Store, Olin, WR Berkley, Rent-A-Center, Roper, American Financial Group, Canon
9:45 a.m.: Services PMI
10:30 a.m.: Dallas Fed survey
1 p.m.: $26 billion 2-year notes
Fed meeting starts
Earnings: BP, Bristol-Myers, Merck, Pfizer, Ford, Honda Motor, Total, Aetna, Twitter, Kraft Foods, UPS, GoPro, Express Scripts, Western Digital, Panera, Yamana Gold, US Steel, Kaiser Aluminum, Corning, Cummins, Owens-Illinois, Supervalu, Penske Auto Group, JetBlue, Genworth Financial, Buffalo Wild Wings, Applied Micro, Samsung Electronics, Aflac, AK Steel, Parker Hannifin
9 a.m.: S&P/Case-Shiller
10 a.m.: Consumer confidence, housing vacancies
1 p.m.: $35 billion 5-year notes
Earnings: Deutsche Bank, Fiat Chrysler, Northrop Grumman, General Dynamics, Hess, Starwood, Brunswick, Carlyle Group, Spirit Airlines, Norfolk Southern, Southern Co, Time Warner, Garmin, GrubHub, International Paper, Thomson Reuters, MasterCard, Marriott, Whiting Petroleum, Williams Cos, Boston Beer, Cabot, Murphy Oil, Baidu, Vertex, Yelp, Shutterfly, LaQuinta, Goodyear
8:30 a.m.: Q1 GDP, pending home sales
1:00 p.m.: $29 billion 7-year notes
2:00 p.m.: FOMC statement
Earnings: ExxonMobil, ConocoPhllips, Royal Dutch Shell, Sanofi, Statoil, BNP Paribas, Visa, AIG, LinkedIn, Colgate-Palmolive, Celgene, Delphi Automotive, Air Products, Cigna, Cardinal Health, Sony, Time Warner Cable, Teva Pharma, Viacom, Beazer Homes, First Solar, FireEye, Dreamworks Animation, Healthsouth
8:30 a.m.: Initial claims, personal income/spending, employment cost index, Fed Gov. Daniel Tarullo
9:45 a.m.: Chicago PMI
Earnings: Chevron, CVS Health, Aon, Calpine, Clorox, Moody’s, Newell Rubbermaid, Duke Energy, Weyerhaeuser, TransCanada, VF Corp, Madison Square Garden, Legg Mason, CBOE
8:30 a.m.: Cleveland Fed President Loretta Mester
9:45 a.m.: Manufacturing PMI
10 a.m.: ISM manufacturing, construction spending, consumer sentiment
3:45 p.m.: San Francisco Fed President John Williams