-S&P 500 up 2.78 (0.26%) to 1,068.20.

-Nasdaq up 6.11 (0.29%) to 2,132.86.

GLOBAL SENTIMENT

Hang Seng down 0.67%

Nikkei down 0.70%

FTSE up 0.17%

UPSIDE MOVERS

(+) PG upgraded to Buy at Citi.

(+) SNDK upgraded to Buy at Merrill.

(+) TOL part of homebuilder sector upgrade; CEO continues to sell shares.

(+) KBH gains amid upgrade.

(+) HEAT turns up, prices shares.

(+) SXCI prices increased share offering.

(+) UFI raises outlook.

(+) ARRY inks distribution deal.

(+) ARNA erases premarket losses finishes up

(+) GLS finishes higher; to become subsidiary of AerCap (AER) in $1.75 bln stock deal.

DOWNSIDE MOVERS

(-) PALM (-3.67%) continues evening decline though to lesser degree; earnings and guidance beat but company also announces stock sale.

(-) SCHW (-2.76%) downgraded to Sell at Goldman Sachs.

(-) GENZ (-1.29%) downgraded to Hold at Deutsche Bank.

(-) MTSC: Slips on downgrade; valuation cited

(-) AMR sees Drop in Q3 sales, traffic

MARKET DIRECTION

Stocks held onto fractional gains as the regular session close after some weekend profit-taking failed to overtake investor optimism, allowing the major indexes to notch fresh 2009 highs. Wall Street is looking ahead to next week's Federal Reserve monetary policy meeting.

During the regular session, analyst upgrades and higher guidance from some companies kept investors buoyant about the prospect of an economic recovery. There was no major economic news.

Palm (PALM) closed down near 3% after the company topped estimates with a smaller-than-expected loss but said it would issue more stock. Palm reported Q1 non-GAAP revs of $360.7 mln, down from $366.8 mln in the year ago quarter. Non-GAAP loss was $0.10 per share, vs. a year ago loss of $0.12 per share. The Street view was revenue of $291 mln and a loss of $0.25 per share. IMAX (IMAX) dropped after shares get cut to "neutral" from "buy" at Merriman Curhan Ford.

Among stocks getting a lift from analysts JP Morgan boosted its view on the homebuilder sector to positive from negative. "While fundamentals will likely not demonstrate an uninterrupted solid rate of improvement over the next six to 12 months, we believe that not only is housing solidly past its trough, but over the next 24 months will continue to recover and drive further upside to the current rally in the home-builder stocks," the analyst said in a note, according to MarketWatch. The analyst upgraded Toll Brothers (TOL) and KB Home (KBH) to "overweight" from "neutral." M.D.C. Holdings (MDC) is dropped to ""underweight" vs "overweight."

Citi raises its rating on Procter & Gamble (PG) to "buy" vs "hold," saying the move is more a call on the shares than on company fundamentals, according to a report on MarketWatch. Citi also raised its price target from $54 a share to $66. It closed up 3.22%

SanDisk (SNDK) gained after BofA/Merrill reportedly raised its rating on the stock to "buy" from "underperform." Callaway Golf (ELY)was upgraded to "outperfrom" from "neutral" at Wedbush Morgan.

e*Trade (ETFC) jumped after Goldman Sachs raised its rating on the shares to "buy" due to impressive trading data for the month. On the flipside, Schwab (SCHW) is down after Goldman cut its rating to "sell" because Goldman expects SCHW's asset management and net interest income revenue to remain under pressure for another year.

Starbucks (SBUX) is firmer on an upgrade to "overweight" from "neutral" at Piper Jaffray. Piper believes mid-teens EPS growth is possible.