U.S. stocks rose Monday as investors put concern about the potential for higher interest rates on hold after a report showed the economy isn't growing fast enough for the Federal Reserve to start winding down its stimulus programs.
The Dow Jones industrial average (^DJI) added 65 points (0.4 percent) to close at 14,974, falling back from above the 15,000 level, which it surpassed earlier in the day, when it gained 173. The S&P 500 (^GSPC) rose 8 points, for a similar 0.5 percent gain, to 1,614. The Nasdaq (^IXIC) added 31 points (0.9 percent) to 3,434.
U.S. manufacturing grew modestly in June after a pickup in new orders and stronger production, according to a private survey. The Institute for Supply Management said its factory index increased to 50.9 in June from 49 in the previous month.
A separate report on construction spending added to the picture of a gradually improving economy. Construction spending rose 0.5 percent in May compared to April, when spending was up 0.1 percent, the Commerce Department said.
In other business news, the U.S. government said it has received $66.3 billion in dividend payments from mortgage giants Fannie Mae and Freddie Mac, after both reported stronger earnings at the start of the year. Fannie Mae paid $59.4 billion to the U.S. Treasury while Freddie Mac paid $7 billion. The payments reflect a housing recovery that has made the mortgage giants profitable again, and are also helping to lower the federal deficit.
Former KPMG partner Scott London pleaded guilty to a securities fraud charge for providing insider information to a friend who plied him with cash bribes, a Rolex watch and other luxury items. London, who entered the plea in U.S. District Court in Los Angeles, could receive up to 20 years in prison when he's sentenced in October.
Among the stocks making big moves:
Onyx Pharmaceuticals (ONXX) surged $44.51, or 51 percent, to $131.33 after the company rejected a takeover bid from Amgen (AMGN), a larger biotechnology company. Onyx said other companies have expressed interest in a buyout.
Cablevision (CVC) rose $1.63, or 9.7 percent, to $18.45 after Reuters reported that Time Warner Cable (TWC) is considering making a bid for the company.
Steinway Musical Instruments (LVB) has agreed to be bought by private-equity firm Kohlberg & Co. for about $438 million. The 160 year-old company suffered from a lack sales during the recession, and while shares have recovered they have yet to return to the peak they achieved just six months prior to the economic downturn. Steinway shares ended Monday's trading up about 16 percent to $35.28.
A Credit Suisse analyst resumed his coverage of Best Buy (BBY) and lifted the electronics chain's prior price target as it continues to work on a turnaround plan. Shares of Best Buy rose sharply to $29.74.
Shares of Tesla Motors (TSLA) rose 9.1 percent to $117.18, their highest price ever, on optimism that the electric car company's deliveries for the second-quarter and full year will be higher than expected.
Google (GOOG) notched a legal victory in its bid to create the world's largest digital books library, winning the reversal of a court order that had allowed authors challenging the project to sue as a group. The 2nd U.S. Circuit Court of Appeals in Manhattan said it was too early for authors to be considered as a group in a lawsuit against the search-engine giant. Google stock advanced almost 1 percent.
Nokia (NOK) rose by more than 3 percent, after the former mobile phone leader announced plans to buy out partner Siemens' (SI) entire 50 percent stake in Nokia Siemens Networks for $2.2 billion.
What to watch Tuesday:
The Commerce Department releases May data on factory orders at 10 a.m. ET. Analysts expect manufacturing activity rose 2 percent during the month, according to consensus estimates.
Automakers report June sales figures. Industry watchers forecast auto sales rose slightly to 15.5 million units last month, up from 15.3 million in May.
Compiled from staff and wire reports.
5 Stocks Investors Love to Hate
Closing Bell: Stocks Rise on Tepid Manufacturing Data
Satellite radio has never been more popular. There are now 23.9 million subscribers after the parent company of Sirius and XM closed out 2012 with 2 million more accounts than it had when the year began.
However, Sirius XM lost its longstanding CEO late last year, and a media conglomerate has acquired a controlling stake in the satellite radio provider -- events that have triggered uncertainty.
Still, Sirius XM is a company that has been consistently profitable and generating growing amounts of revenue and free cash flow on its own. And, auto sales also remain strong: Those represent the largest source of new subscribers for Sirius XM, as most of its users tune in through car factory-installed receivers.
A few years ago, Nokia was the undisputed top dog in mobile phone handsets. The Finnish company was a global juggernaut at a time when consumers were swapping beepers -- remember those? -- for wireless phones.
But the market has evolved repeatedly since then. Cheaper feature phones have been replaced by smartphones that run apps and surf the Web, and Nokia has been slow to embrace the platforms that matter. Obviously it couldn't put out an iPhone, but it also wasn't able to match Samsung's early push into Android devices that are now globally popular.
Nokia is accepting billions to back Microsoft's fledgling Windows Phone mobile operating system, but the stock has been stuck in the single digits for more than two years.
It isn't easy being a regional telco, offering up landlines, Internet, and cable TV to rural markets.
A big draw for investors in Frontier Communications is its meaty dividend payout. Even after slashing its quarterly rate from $0.1875 a share to $0.10 a share last year, the stock's still yielding 10 percent. The large dividend is significant, since shorts actually have to cover that when it gets paid out.
Analysts see revenue and profitability continuing to decline here, and pessimists are holding out for more dividend cuts in the future.
The old "Intel inside" ads came out at a time when PC sales were booming. Manufacturers were hopping on Intel microprocessors to power desktops and laptops, only turning to smaller rival Advanced Micro Devices (AMD) when they wanted to show Intel that they weren't entirely dependent on the chip giant.
But the tech world have taken an "Intel outside" approach in recent years. PC shipments have fallen for two years, and Intel's efforts to get its chips into the smartphones and tablets that people are actually buying haven't been effective enough to offset its declines on the PC side.
The poster child for the "too big to fail" banking giants is starting to bounce back.
Bank of America stock hit a fresh 52-week high this month, and regulators finally eased up on the bank after it cleared its stress test. That freed Bank of America to return more of its money to shareholders beyond its token quarterly dividend of $0.01 a share, and the financial services giant's first move was to declare a huge share repurchase program.
As long as the housing market holds up and the general state of corporate America makes lending money to companies a smart bet, Bank of America will do just fine. Shorts, naturally, don't see it that way at all.