NEW YORK – Stocks rose Monday, with the Nasdaq posting its seventh day of gains, boosted by oil companies such as Exxon Mobil Corp. (XOM), and a report that Apple Computer Inc. (AAPL) was talking with Intel Corp. (INTC) about using its microprocessors in the Macintosh computer line.
The Dow Jones industrial average (search) closed up 51.65 points, or 0.49 percent, at 10,523.56, its highest level since April 7. The Standard & Poor's 500 Index (search) was up 4.58 points, or 0.39 percent, at 1,193.86. The technology-laced Nasdaq Composite Index (search) was up 10.23 points, or 0.50 percent, at 2,056.65.
Strategists attributed the broad market's gains to the continued low price of oil, which investors took as a sign the U.S. economy would stay on stable footing. U.S. crude futures are about $9 off their $58.28 record high hit in early April.
"There's been almost a delayed reaction to the drop in oil prices," said Rick Meckler, president of Libertyview Capital Management, a Hoboken, New Jersey-based investment firm that oversees about $2 billion in investments.
Still, light, sweet crude for July delivery rose 51 cents to settle at $49.16 on the New York Mercantile Exchange (search). Last week, falling oil prices helped stocks to post their strongest gains in six months. But oil rose on Monday on fund buying after support held at $48, traders said.
"We're starting to price in the demand side," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. "Recent expectations are that demand is going to be really strong going into the Memorial Day" weekend.
"Oil is up slightly and the market rally is taking a bit of a breather," said Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray. "Goldman's comments on the software sector are helping those stocks and the comments on oil companies are helping that sector. But I wouldn't call those earth-shattering and market-changing events. People are waiting for the next spell of news."
Many investors remained on the sidelines ahead of the release of the Federal Reserve's May 3 meeting minutes and the latest reading on the gross domestic product, due later this week.
"I think these economic stats will be what generates turnover in this market, but for right now, it's good to see last week's rally continuing here," said Brian Williamson, an equity trader with The Boston Company Asset Managemen
Apple's (AAPL) stock jumped $2.21, or 5.89 percent, to close at $39.76, giving the biggest boost to the Nasdaq, after The Wall Street Journal reported it was considering switching to Intel chips for its line of Macintosh personal computers.
Shares of Intel (INTC), a Dow component that trades on Nasdaq, were up 15 cents, or 0.6 percent, at $26.50. Apple's current chip supplier, International Business Machines Corp. (IBM), rose 10 cents, or 0.1 percent, to $76.51, on the NYSE.
An Apple move to Intel's chips would make Macs far less expensive — a major hurdle in Apple's ongoing battle with cheaper PCs already using Intel processors and Microsoft's operating system.
Shares of oil companies were also up for the day, following an upgrade of the sector by Sanford Bernstein. The broker raised Exxon Mobil, ConocoPhillips and Chevron Corp..
Exxon Mobil (XOM) shares rose 74 cents, or 1.4 percent, to $54.75, while ConocoPhillips (COP) was up $2.24, or 2.2 percent, to $103.35 and Chevron (CVX) rose 85 cents, or 1.6 percent, to $52.57, all on the NYSE.
Another upgrade came in the software sector, after Goldman Sachs said new technology that lets the Internet be used to centralize applications could benefit companies including Microsoft, Oracle Corp. (ORCL), SAP AG and Mercury Interactive Corp. .
Microsoft (MSFT) shares rose 11 cents to $25.85, Oracle was up 15 cents at $12.70, SAP rose 6 cents to $41.76 and Mercury rose 50 cents to $45.39.
Also in the tech sector, shares of Google (GOOG) surged $13.84, or 5.7 percent, to $255.45 on Nasdaq, on speculation the search engine firm could be added to the S&P 500 index.
Wal-Mart (WMT), the world's largest retailer, focuses on low-income shoppers who are particularly sensitive to higher energy prices. Its stock rose 1.4 percent, or 67 cents, to $47.85 on the NYSE after the retailer confirmed it's on track to hit May sales growth forecasts.
Campbell Soup Co. (CPB) released third-quarter earnings that topped Wall Street's expectations. Its shares rose 48 cents, or 1.6 percent, to $30.82 on NYSE.
Generic drug maker Able Laboratories Inc. (ABRX) said it was recalling its entire product line of drugs and withdrawing seven drugs that were up for regulatory approval. The move comes after the company suspended product shipments on Thursday due to quality control issues. Shares of Able plunged 29.8 percent, or $2.14, to $5.05 and have lost nearly 80 percent of their value since closing at $24.63 on Wednesday.
On the NYSE, about 1.27 billion shares changed hands, just 86 percent of the 1.46 billion daily average for last year. About 1.67 billion shares were traded on Nasdaq, 90.6 percent of the 1.81 billion daily average last year.
The number of stocks rising outnumbered the number declining by a ratio of two to one on the NYSE, and by about six to five on Nasdaq.
The Russell 2000 index of smaller companies was up 3.46, or 0.57 percent, at 612.87.
Overseas, Japan's Nikkei stock average surged 1.1 percent. In Europe, Britain's FTSE 100 was up 0.36 percent, France's CAC-40 gained 0.54 percent for the session, and Germany's DAX index rose 1.06 percent in late trading.
Reuters and the Associated Press contributed to this report.