By Rodrigo Campos
NEW YORK (Reuters) - U.S. stocks rose on Monday, cutting into the previous session's sharp decline, as China's steps to stimulate its slowing economy and as earnings, including those from Morgan Stanley, lured money back into equities.
In the second industry-wide cut in two months, China's central bank on Sunday reduced the amount of cash that banks must hold as reserves in a move to help spur bank lending and combat slowing growth.
Morgan Stanley shares rose 1 percent to $37.11 after the Wall Street investment bank reported a 60 percent rise in quarterly profit and raised its dividend by 50 percent to 15 cents per share.
Hasbro jumped 7.4 percent to $70.75 after the toymaker reported a surprise increase in revenue.
Royal Caribbean fell 6.8 percent to $73.67 after it reported a 3.7 percent fall in revenue, saying a strong dollar hurt onboard spending by customers from outside the United States.
The market is responding to earnings that are good but not good enough to push stocks to new records, while concerns remain about currency effects, Greece and China, said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
"These have kept the market very range-bound, and we just keep climbing, falling, and starting to climb back up again."
At 10:01 a.m. EDT (1401 GMT), the Dow Jones industrial average rose 226.48 points, or 1.27 percent, to 18,052.78, the S&P 500 gained 19.09 points, or 0.92 percent, to 2,100.27 and the Nasdaq Composite added 45.21 points, or 0.92 percent, to 4,977.03.
Nearly 76 percent of the S&P 500 components that have reported earnings have beat analyst expectations, so far topping the 70 percent average in the last four quarters. However, just 47 percent have beat on revenue, compared to the 58 percent average top line beat over the last year.
"What's helped the market today is the story about more stimulus in China," said Meckler.
The downside, he said, is that the stimulus responds to a stubborn lack of growth.
Despite lackluster U.S. economic data, a world grappling with slow growth, and concern that Greece and Ukraine could default on their debt, the U.S. stock market has been more than resilient - making it hard for short sellers. Major indices are less than two percent below record highs.
Advancing issues outnumbered declining ones on the NYSE by 2,221 to 605, for a 3.67-to-1 ratio on the upside; on the Nasdaq, 1,631 issues rose and 820 fell, for a 1.99-to-1 ratio favoring advancers. The S&P 500 was posting 2 new 52-week highs and 1 new low; the Nasdaq Composite was recording 37 new highs and 43 new lows.
(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Nick Zieminski)
