By Ankika Biswas and Shashwat Chauhan
(Reuters) - Wall Street's main indexes jumped more than 1% on Monday as megacaps rose to kick-start a week packed with corporate earnings and economic data, while investors also monitored the Israel-Hamas conflict.
The Dow touched a near four-week high and was on course for its best day in more than two months, while the S&P 500 and the Nasdaq were headed for their best days in nearly two weeks.
Megacaps Microsoft (NASDAQ:MSFT), Meta Platforms, Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN) rose between 1% and 2%.
Consumer discretionary and materials led the gains across major S&P 500 sectors, while utilities and energy stocks lagged behind.
"There's a little bit of risk-on sentiment coming from a pretty solid start to their earnings season," said Ross Mayfield, investment strategy analyst at Baird.
"It says that what the economic data is also saying, which is that the economy is stronger than we were giving it credit for at the year's start, certainly not recessionary."
Results from large banks Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), pharmaceutical giant Johnson & Johnson (NYSE:JNJ), EV maker Tesla (NASDAQ:TSLA) and video-streaming pioneer Netflix (NASDAQ:NFLX) are due this week.
Third-quarter earnings for S&P 500 companies are estimated to grow 2.2% year-on-year, LSEG data showed on Friday.
Long-dated Treasury yields rose amid increased U.S. government debt issuance while a possible Israeli ground offensive in Gaza has led to uncertainty in the bond market.
Investors also await economic data including retail sales for September and the Philly Fed Business Index for October later this week.
Latest data showed the NY Fed's "Empire State" index, a gauge of manufacturing activity in New York State, fell to -4.60 in October, against expectations of a drop to -7.
The Dow Jones Transport Average index, seen as an indicator of economic prosperity, was on track for its best day in nearly three months.
Investors are focused on Federal Reserve Chair Jerome Powell's comments on Thursday, before Fed officials enter a blackout period starting Oct. 21 ahead of their policy meeting.
Philadelphia Fed President Patrick Harker reiterated his view from Friday that the U.S. central bank was likely done with its rate-hike cycle.
Among stocks, Apple (NASDAQ:AAPL) bucked the trend among its growth peers, dipping 0.1% on a report the company's iPhones were off to a disappointing start in China.
Lululemon Athletica (NASDAQ:LULU) added 9.6% as the sportswear apparel maker is set to join the S&P 500 index this week, replacing Activision Blizzard (NASDAQ:ATVI).
Moderna reaffirmed its forecast of $6 billion to $8 billion in COVID vaccine sales for the year. The company's shares fell 5.0%.
Charles Schwab (NYSE:SCHW) jumped 4.8% as the brokerage posted a smaller-than-expected drop in quarterly profit.
Advancing issues outnumbered decliners by a 3.06-to-1 ratio on the NYSE and a 2.30-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and six new lows, while the Nasdaq recorded 29 new highs and 148 new lows.