The markets opened higher as investors embraced a solid performance from IBM. The Dow rose 76 points to 12,682 while Nasdaq jumped 20 points to 2460.

On the upside

International Business Machines (NYSE: IBM), a Dow component, issued early profit estimates that were 24% above year-ago levels to beat analysts' forecasts.

Shares of Citigroup (NYSE: C) were slightly higher ahead of its earnings results this week. Meanwhile, its efforts to raise funds from a Chinese bank may be opposed by the Chinese government, according to a Wall Street Journal report.

Shares of WellCare Health Plans (NYSE: WCG) were boosted by new contract approvals, higher enrollment and analysts' upgrade.

On the downside

Sears Holdings (Nasdaq: SHLD), which operates Sears and Kmart retail stores, warned that its 4th quarter results may show a significant decline.

Computer networking software provider Compuware (Nasdaq: CPWR) lowered its 3rd quarter outlook due to delayed recognition in sales.

Shares of luxury goods retailers like Coach (NYSE: COH) and Tiffany and Company (NYSE: TIF) continued to lose ground due to worries of soft consumer spending.

In the broad market, advancing issues outpaced decliners by a margin of more than 2 to 1 on the NYSE and by nearly 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks rose 3 points to 708..