NEW YORK – Stocks pared their early losses and rose Monday as oil prices fell more than $1, allowing investors to shrugg off disappointing results from a number of major companies, including Dow component 3M Co. (MMM).
The Dow Jones industrial average (search) rose 22.94, or 0.23 percent, to 9,956.32. The Standard & Poor's 500 Index (search) was up 5.82, or 0.53 percent, at 1,114.02. The technology-laced Nasdaq Composite Index (search) gained 25.02, or 1.31 percent, to 1,936.52.
Investors who have sold stocks for months as oil prices climbed reversed course Monday and started buying as the price of crude declined. While oil topped $55 per barrel in pre-market trading, the latest production report from OPEC — showing crude production last month at 25-year highs — deflated futures trading substantially.
November crude futures closed at $53.67, down $1.26, on the New York Mercantile Exchange (search).
"Oil's precipitous slide lower and lower is giving investors a little more confidence in equities in an otherwise quiet afternoon," said Brian Williamson, an equity trader at The Boston Company Asset Management. "I do think there could be some wait-and-see on earnings, since we have so many of them coming this week."
Still, prices have gained 67 percent since the start of the year. Investors are focused on whether the oil price surge has hit company earnings and dampened consumer confidence.
The good news about oil helped investors overcome 3M Co.'s earnings, which missed Wall Street's expectations as the company lowered its full-year outlook, blaming the volatile global economy for lower revenues. At least 30 percent of the Standard & Poor's 500 companies are scheduled to report earnings this week, though another rise in oil prices could draw attention away from the reports.
Shares of 3M, which makes everything from Scotch tape to Post-It notes to medical products, tumbled $4.07 to $73.91. 3M reported a third-quarter profit of 97 cents per share, with analysts expecting earnings of 98 cents per share. 3M's chairman and chief executive said he was cautious about the global economy.
"3M is widely owned, but really isn't a market leader or a proxy for the market the way it once was. Nobody's making investing decisions based on 3M," said Brian Pears, head equity trader at Victory Capital Management in Cleveland. "Obviously, oil is moving things. Yeah, it's nice we're off of that $55 per barrel mark, but a few cents here or there doesn't change the picture a whole lot."
Tech stocks rose as investors waxed optimistic on earnings from International Business Machines Corp. (IBM), which reported earnings after the session. IBM, which beat Wall Street estimates by 3 cents per share before a one-time charge, closed at $85.82, up $1.07, and gained another $1.12 to $87.04 in after-hours trading.
Toy manufacturing rivals Mattel Inc. (MAT) and Hasbro Inc. (HAS) both saw weakness in the third quarter. Mattel's profits fell 5.2 percent in the quarter due to slow sales of its Barbie, Matchbox and Hot Wheels toys, though the company managed to beat earnings forecasts by a penny. Hasbro, meanwhile, took an accounting charge that cause the toy maker to miss earnings estimates by 6 cents per share. Mattel lost 47 cents to $17.50, while Hasbro shed $1.20 to $17.26.
Dow component Pfizer Inc. (PFE) gained 50 cents to $29 after the pharmaceutical giant said it would conduct additional scientific studies on its Celebrex arthritis drug and potential cardiovascular risks. Merck & Co. (MRK) pulled its rival Vioxx drug from the market last month due to an increased risk of stroke and heart attack. Merck rose 22 cents to $30.72.
Forest Laboratories Inc. (FRX) said its earnings rose 60 percent for the quarter on the strength of its antidepression drugs. Forest, which surpassed analysts' forecasts by 3 cents per share, was up 59 cents at $48.11.
Insurance broker Marsh & McLennan Cos. (MMC) fell about 11 percent to $26.06 amid continued fall-out from New York Attorney General Eliot Spitzer's probe into alleged price rigging that has sent shock waves through the insurance industry. Spitzer on Thursday sued Marsh & McLennan for allegedly steering clients to certain insurers in exchange for payments.
The Russell 2000 index of smaller companies was up 2.81, or 0.49 percent, to 572.23.
Overseas, Japan's Nikkei stock average fell 0.16 percent. In Europe, Britain's FTSE 100 closed up 0.08 percent, France's CAC-40 lost 0.3 percent for the session, and Germany's DAX index dropped 0.18 percent.
Reuters and the Associated Press contributed to this report.