Wall St up on earnings, Portugal bank deal

NEW YORK (Reuters) - U.S. stocks rose in morning trading on Monday, lifted by earnings including those of Warren Buffett's Berkshire Hathaway, with gains partly offset by drops in high-yielding dividend stocks in the utilities sector.

The S&P 500 fell 2.7 percent last week, its biggest percentage drop since the week through June 1, 2012. Despite the sharp decline, the benchmark's technical picture was still bullish, analysts said, giving support to the rebound.

The bailout of Portugal's largest listed lender, Banco Espirito Santo , supported bank shares. Lisbon agreed to rescue BES with a $6.6 billion bailout.

"From a technical viewpoint, the market managed on Friday to hold the lower end of the trading range and the fact we did that is helping the market out this morning," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "News from Portugal certainly is a step in the right direction and after the sharp losses of last week, the market needs to catch its breath."

Warren Buffett's Berkshire Hathaway Inc said late Friday second-quarter profit soared 41 percent to a record high due to substantial investment gains and improved results in manufacturing, service and retail businesses. The company's class B shares gained 1.4 percent to $127.57.

The Dow Jones industrial average rose 5.59 points or 0.03 percent, to 16,498.96, the S&P 500 gained 3.16 points or 0.16 percent, to 1,928.31 and the Nasdaq Composite added 14.48 points or 0.33 percent, to 4,367.12.

Utilities were the worst performing of the S&P's 10 industry sectors, down 1.4 percent. At its session low on Monday, the index was down 8.8 percent from its intraday record high set June 30.

Shares of Michael Kors tumbled 6.6 percent to $76.49. Shares had jumped more than 10 percent before the bell following results that showed a 43 percent rise in quarterly revenue, but quickly reversed. The company said it expects margins to shrink for the year.

Pike Corp soared almost 50 percent to $11.86. Investment firm Court Square Capital Partners and Pike's Chief Executive J. Eric Pike, will take the company private in a deal valued at $12 per share.

Amgen said a late-stage study found that its blood cancer drug helped patients live significantly longer without the disease worsening, compared with standard treatment. Amgen shares gained 1.2 percent to $127.09.

Hotel, energy and financial services Conglomerate Loews Corp posted a 57 percent drop in quarterly profit on lower earnings from Diamond Offshore Drilling . Loews shares slipped 0.4 percent to $42.09 while Diamond fell 0.4 percent to $46.28.

Diamond was downgraded and its price target was cut by Deutsche Bank, alongside similar bearish calls on Ocean Rig , Seadrill , Rowan Cos and others in the sector. The S&P oil and gas drilling index fell 1.1 percent.

(Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Nick Zieminski)

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