NEW YORK – Stocks rose Monday, helped by a 2 percent gain in investment bank Morgan Stanley after CEO Philip Purcell announced his departure, but oil prices surging above $55 limited any gains.
The Dow Jones industrial average (search) finished up 9.93 points, or 0.09 percent, at 10,522.56. The Standard & Poor's 500 Index (search) was up 2.71 points, or 0.23 percent, at 1,200.82. The Nasdaq Composite Index (search) was up 5.96 points, or 0.29 percent, at 2,068.96.
Oil prices spiked higher ahead of this week's OPEC meeting; members are expected to raise the daily output quota by half a million barrels, but analysts said the move would have little impact on prices. Light crude for July delivery surged $2.08 to settle at $55.62 per barrel on the New York Mercantile Exchange, a seven-week high.
The oil price increase was making investors "apprehensive and anxious," said Ned Riley, chief investment officer at Riley Asset Management. "Crude has been a detriment to this market for a while and it's fueled some of the inflation fears," Riley added.
Stocks have been gaining for nearly eight weeks, after hitting 2005 lows in April. However, all three indexes are still in the red for the year to date.
Shares of Morgan Stanley (MDW), a component of the broad Standard & Poor's 500 index, rose $1 to $50.88 on the New York Stock Exchange. News media reported that Purcell has been fired, but Purcell said he had decided to retire. He had faced extensive criticism in recent months and cited "continuing personal attacks on me" as a reason for his decision.
Investors have been greatly preoccupied with the impact higher energy prices are having on inflation and consumer spending. The Labor Department's (search) May Producer Price Index (search), a measure of wholesale prices and an indicator of inflation, was due out Tuesday. The closely watched Consumer Price Index (search), which measures retail prices, comes out Wednesday.
"All the talk has been about, 'Are we coming out of a soft patch?' For me, it's very obvious we're coming out of the soft patch, because if we weren't, the market, as it anticipates developments, would be well into a downtrend," said Ken Tower, chief market strategist for Schwab's CyberTrader. "I think it's clear the market is anticipating better economic numbers going forward. And I think we'll get evidence of that tomorrow."
Bonds continued last week's sell-off, with the yield on the 10-year Treasury note rising to 4.09 percent, up from 4.05 percent late Friday. The dollar climbed to nine-month highs against the euro and the Japanese yen thanks to a better-than-expected U.S. trade deficit, reported Friday. Gold prices also rose.
Shares of Hewlett-Packard Co. (HPQ) rose 2 percent, or 47 cents, to $23.89. After the close, the No. 2 computer maker named Todd Bradley to head up its PC division and said the unit will once again be a stand-alone business.
Among Nasdaq stocks, Electronic Arts Inc. (ERTS) rose 8.4 percent, or $4.50, to $58 ahead of a planned announcement of a new global marketing initiative with the National Basketball Association.
Satellite radio operator Sirius Satellite Radio (SIRI) rose 6 percent, or 34 cents, to $5.99, after it said it developed a new technology that will initially increase its network capacity by about 25 percent.
The Boeing Co. (BA) lost out on a major order as Qatar Airways opted to purchase up to 60 Airbus A350 instead of Boeing's 787 Dreamliner. The two aircraft makers will be vying for orders this week at the Paris Air Show. Boeing shed 2 cents to $64.63.
Stun-gun maker Taser International Inc. (TASR) rose 3.5 percent, or 38 cents, to $11.22, after announcing a $1.4 million dollar order from the military for non-lethal weapons. The company, which had 2004 sales of about $68 million, will ship the order in the second quarter.
Stock trading was light, with 1.28 billion shares changing hands on the New York Stock Exchange, below the 1.46 billion daily average for last year. About 1.45 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year. Advancers outnumbered decliners on the New York Stock Exchange by 10-to-7 and by 8-to-7 on Nasdaq.
The Russell 2000 index of smaller companies was up 2.69, or 0.43 percent, at 629.02.
Overseas, Japan's Nikkei stock average rose 0.06 percent. In Europe, France's CAC-40 gained 0.46 percent, Britain's FTSE 100 was up 0.40 percent and Germany's DAX index added 0.29 percent.
Reuters and the Associated Press contributed to this report.