Earnings reports begin arriving at a steady clip this week, giving investors fresh indications about companies and the overall economy. This week nearly half the 30 Dow Jones industrial average's component companies report results.

While investors have been girding for a slowdown in growth of corporate profits, they are hoping consumer spending will remain robust. The Commerce Department on Monday reported that consumers spent strongly last month, sending retail sales up by about 0.7 percent. The figure was close to what analysts predicted, and up from a revised 0.5 percent increase in February.

Investors were also pleased by news of a buyout of SLM Corp., the student lender better known as Sallie Mae. SLM agreed Monday to be sold to two private investment funds and J.P. Morgan Chase & Co. and Bank of America Corp. for $25 billion, or $60 per share. Sallie Mae rose $8.40, or 17.9 percent, to $55.16.

But analysts warned that Wall Street's good humor was unlikely to last. Robert N. Schaeffer, portfolio manager at Becker Value Equity Fund, contends that a pop in stocks is typical when earnings reports begin to flow in and are better than expected.

"The positive reaction to the earnings tends to be short-lived traditionally," he said. "There is also a tendency for companies with better earnings reports to report early. The companies that are going to disappoint tend to drag their feet a bit."

In late morning trading, the Dow Jones industrial average rose 92.07, or 0.73 percent, to 12,704.20. The Dow's increase Monday put the blue chip average back above where it stood before the major U.S. indexes fell more than 3 percent on Feb. 27 as part of a worldwide selloff.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 12.53, or 0.86 percent, to 1,465.38, and the Nasdaq composite index rose 21.03, or 0.84 percent, to 2,512.97.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.74 percent from 4.77 percent late Friday. The dollar traded near all-time lows versus the euro, but strengthened against the yen after the Group of Seven wealthiest nations decided Friday not to urge Japan to raise interest rates to boost its currency.

Oil prices fell Monday, with a barrel of light sweet crude dropping 73 cents to $62.90 on the New York Mercantile Exchange. Gold also rose.

Investors appeared unfazed by economic reports. The Commerce Department reported businesses increased their inventories by 0.3 percent in February, the largest increase in five months. The New York Federal Reserve also reported that its regional manufacturing activity expanded slightly in April, with the overall index rising to a reading of 3.80 from an unrevised reading of 1.85 in March.

Profit news drew investors' attention Monday as they were eager to see how well corporate earnings would hold up. Wall Street anticipates the reports will indicate that corporate growth slowed in the first three months of 2007 compared with previous quarters. Standard & Poor's recent estimate of first-quarter earnings growth for S&P 500 companies is 3.8 percent.

Investor sentiment about earnings can be easily swayed, however, as one bad report has in the past soured Wall Street's mood over the overall corporate profit picture.

Citigroup, the largest U.S. financial institution, said its first-quarter profit fell by 11 percent, but the results included a charge to cover a massive restructuring. Excluding that charge, increased revenue helped push profits above expectations. Citigroup, the best performer in the Dow, rose $1.40, or 2.7 percent, to $53.

Eli Lilly & Co.'s first-quarter profit fell 39 percent. After adjusting for certain items, the company's profit came in above expectations. The drug maker also reported a rise in revenue, and raised its full-year sales and earnings guidance. The stock rose $1.05 to $57.93.

Wachovia Corp., the nation's fourth-largest bank, reported a rise in profits that surpassed Wall Street's expectations — which along with Citigroup's results appeared to reassure some investors that the large U.S. banks are faring better than anticipated, despite trouble in the subprime lending sector. Wachovia rose 95 cents to $54.95.

Mattel Inc., the world's largest toy maker, said its first-quarter profit slipped 60 percent, because the year-ago period benefited from a large settlement, but the results beat the average forecast. Mattel rose 34 cents to $28.68.

In other corporate news, Fremont General Corp. said it is planning to sell its residential real estate business and about $2.9 billion in subprime residential mortgages at a loss. The moves will effectively shut down the company, which rose $1.73, or 25 percent, to $8.78.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 513.9 million shares.

The Russell 2000 index of smaller companies rose 8.65, or 1.06 percent, to 828.03.