NEW YORK – Stocks reversed course and rose Monday as crude oil prices headed lower, while a near 6-percent surge in insurer American International Group (AIG) helped the Dow.
The Dow Jones industrial average (search) closed up 16.84 points, or 0.16 percent, at 10,421.14, based on the latest available data. The Standard & Poor's 500 Index (search) closed up 3.20 points, or 0.27 percent, at 1,176.12. The Nasdaq Composite Index (search) closed up 6.26 points, or 0.32 percent, at 1,991.07.
Earlier, the Dow touched a new intraday low for 2005, falling to its lowest level since early November.
But AIG rose after New York Attorney General Eliot Spitzer (search ) said a "civil resolution" was achievable in his probe of the insurer's accounting. AIG gained $2.35 to $53.30.
"The market's very oversold and there are some pretty pessimistic expectations right now," said John Hughes, managing director at Epiphany Equity Research.
"But seasonally we're getting into the spring-time and that typically leads to a rally. What's driving (the market) today is oil -- it started the day higher but has come off. Also the news out of AIG almost did more for the market than oil did."
U.S. crude oil futures seesawed in and out of negative territory on Monday as traders took profits after oil rose to a record high of $58.28 per barrel in overnight trade. NYMEX May crude futures settled $57.01, down 26 cents on the New York Mercantile Exchange (search) after hitting a record high at $58.28 in overnight electronic trade.
"It's hard to say where that line in the sand is, that level for oil prices where the market will seriously sell off," said Scott Wren, equity strategist for A.G. Edwards & Sons. "I do think that if you have sustained levels of $60 to $65, then the market will be very hard pressed to make any move to the upside."
Not even ChevronTexaco's (CVX) move for Unocal, which valued the company at $62 per share, was enough to move the market. Unocal (UCL) tumbled 7.4 percent, or $4.75, to $59.60, due to the relatively low valuation; ChevronTexaco lost 3.9 percent, or $2.33, to $56.98.
Morgan Stanley (MWD) climbed $1.43 to $58.30, after a media report said the company's board had approved the sale of its Discover Card credit division. Dow Jones Newswires, citing an unidentified source, reported the board had authorized the divestiture, which is expected to net between $8 billion and $9 billion. A Morgan Stanley spokeswoman called the report a "market rumor."
MCI Inc. (MCIP) slumped 21 cents to $25.08 after it said it will reopen talks with Qwest Communications International Inc.(Q), despite having agreed to a $7.6 billion takeover bid by Verizon Communications Inc. (VZ). Qwest, which sweetened its offer to nearly $9 billion, added 18 cents to $3.82, while Verizon was up 46 cents at $35.65.
General Motors Corp. (GM) lost 33 cents to $29.05 after the company said Chairman and CEO Rick Wagoner would take direct control over daily responsibility for the automaker's struggling North America division.
Wal-Mart Stores Inc. (WMT) rose 21 cents to $49.20 after the retailer saidSaturday that March sales at U.S. stores open at least one year rose slightly more than February's increase.
Shares of NCR Corp. (NCR) were up 1.2 percent. A sell-off in NCR shares last week after its chief executive was named to take over at Hewlett-Packard Co. (HPQ) was unjustified, according to an analyst quoted in this week's Barron's financial newspaper.
Fannie Mae (FNM) tumbled 3 percent, or $1.78, to $51.46, on news of a broadening investigation into accounting problems at the home financing company.
Among stocks gaining was consumer products giant Procter & Gamble Co. (PG), up $1.29, or 2.5 percent, at $53.90 after it said it will raise list prices to retail customers of a premium brand coffee. P&G also is among the 30 stocks in the Dow.
Overall, trading was active, with 1.64 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 1.63 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year. Advancers and decliners were roughly even on the New York Stock Exchange, while decliners outnumbered advancers by about 8 to 7 on Nasdaq.
The Russell 2000 index of smaller companies was up 2.21, or 0.36 percent, at 613.76.
Overseas, Japan's Nikkei stock average fell 0.48 percent. In Europe, Britain's FTSE 100 was down 0.35 percent, Germany's DAX index dropped 0.73 percent, and France's CAC-40 lost 0.68 percent.
Reuters and the Associated Press contributed to this report.