* IBM slumps after quarterly results
* Apple gains after hours on strong iPhone sales
* Dow up 0.12 pct, S&P up 0.91 pct, Nasdaq up 1.35 pct (Adds market close, volume, Apple stock price)
By Yasmeen Abutaleb
NEW YORK, Oct 20 (Reuters) - U.S. stocks ended higher on Monday on investor hopes for a strong earnings season, but IBM’s disappointing results limited gains.
Earnings reports from Halliburton, Gannett Co , and others, helped ease the worries over global growth and falling commodity prices that last week helped drive stocks close to correction territory.
“Some of the concerns of last week have subsided,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
“The more people just focus on the fundamental values and earnings and revenues and less on headlines, the more stocks have an opportunity to move higher.”
IBM shares slumped 7.1 percent to $169.10, the biggest drag on both the Dow and S&P 500, after third-quarter earnings fell well short of Wall Street expectations. IBM abandoned its 2015 operating earnings target and said it would pay Globalfoundries $1.5 billion over three years to take its loss-making semiconductor unit.
The Dow Jones industrial average rose 19.26 points, or 0.12 percent, to 16,399.67, the S&P 500 gained 17.25 points, or 0.91 percent, to 1,904.01 and the Nasdaq Composite added 57.64 points, or 1.35 percent, to 4,316.07.
Small caps also rebounded, with the Russell 2000 up 1.2 percent.
The CBOE Volatility index fell 15.5 percent and closed below its 14-day moving average. The VIX had jumped 51 percent in two weeks.
Earnings season will ramp up significantly this week, with nearly 130 S&P 500 companies scheduled to report. Third-quarter earnings are expected to increase 6.7 percent from a year earlier on revenue growth of 3.6 percent.
After the close, Apple Inc posted better-than-expected revenue after its best new-iPhone launch on record. Shares rose slightly to $100.90.
Of the 87 companies in the S&P 500 that have reported quarterly earnings through Monday morning, 63.2 percent have beat analyst expectations, roughly matching the average since 1994 but below the 67 percent rate in the past four quarters, according to Thomson Reuters data.
The largest percentage gainer on the S&P 500 was Tesoro Corp , up 8.4 percent, while the largest percentage decliner was IBM.
The top gainer on the Nasdaq 100 was Celgene, up 4.4 percent, while the largest decliner was Cognizant, down 1.4 percent.
Advancing issues outnumbered decliners on the NYSE by 2,281 to 811, for a 2.81-to-1 ratio on the upside; on the Nasdaq, 1,845 issues rose and 833 fell for a 2.21-to-1 ratio favoring advancers.
The benchmark S&P 500 index posted 6 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 20 new highs and 37 new lows.
About 6.4 billion shares changed hands on U.S. exchanges, below the 8.5 billion average for the month to date, according to BATS Global Markets. (Editing by Bernadette Baum, Nick Zieminski and Peter Galloway)