NEW YORK (CNNMoney)
The Dow Jones Industrial Average gained in early trading following upbeat reports from Coca-Cola (KO, Fortune 500) and Johnson & Johnson (JNJ, Fortune 500). The S&P 500 and the Nasdaq were also higher.
Corporate earnings are in focus this week with nine Dow companies and 10% of the S&P 500 set to release first quarter results.
Overall, earnings in the quarter are expected to fall 1.6% versus last year, according to FactSet Research, although many of the early corporate reports have been better than expected, including Coke today and Citigroup yesterday.
Related: Things are looking up for Citigroup
Stocks have been choppy over the past few weeks as concerns about the true valuations of so called "momentum stocks," the tech and biotech companies that had an incredible run in the past year, but have fallen sharply in recent days.
But now, investors are likely taking a more realistic approach as they focus on individual earnings reports, as well as economic data such as the upcoming inflation report, said Art Hogan, chief market strategist for Wunderlich Securities.
Popular tech stocks like Google (GOOGL), Facebook (FB, Fortune 500) and Twitter (TWTR) rebounded yesterday and are up over 1% today in early trading.
"We're moving into the heart of earnings season now," he said."We've got a lot of financial reporting this week. The bars are set low enough that earnings expectations are in line with reality."
Related: Fear & Greed Index slides into extreme fear
In economic news, the government's Consumer Price Index rose 0.2% in March, which was slightly stronger than expected. Yes, a little inflation is a good thing at the moment. Excluding food and energy prices, the index increased 0.1%, matching expectations.
A measure of manufacturing activity in the New York area unexpectedly fell in April. The so called "empire index" fell to 1.3 this month, according to the Federal Reserve Bank of New York. Economists were expecting an increase.
U.S. stocks closed higher Monday after a choppy day of trading, snapping a two-day losing streak that roiled the markets. All three indexes are still down for the year.
Trading volume is expected to be light this week, with many market participants taking time off for the Passover holiday. U.S. markets will be dark on Friday in honor of Good Friday.
Related: CNNMoney's Tech30
European markets were mixed in midday trading, with tension in Ukraine weighing on sentiment. Germany continues to take the biggest hit as its economy has the closest ties to the tense region.
"Ukraine has the ability to disrupt the entire focus on this market if it escalates," said Hogan, though he said that Wall Street is more focused on earnings season for now.
Asian markets closed with mixed results.
First Published: April 15, 2014: 9:51 AM ET
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