U.S. stocks rose Monday, pushing the Standard & Poor's 500 index to its highest in more than 4 1/2 years, as a steep fall in oil prices and stronger-than-expected earnings boosted optimism for corporate profits.

Home improvement chain Lowe's Cos. Inc. (LOW) reported solid results, while a higher-than-expected forecast for 2006 operating earnings from telecommunications company Verizon Communications Inc. also lifted sentiment.

The Dow Jones industrial average was up 35.70 points, or 0.32 percent, at 11,097.55. The Standard & Poor's 500 Index was up 4.69 points, or 0.36 percent, at 1,294.12. The Nasdaq Composite Index was up 20.14 points, or 0.88 percent, at 2,307.18.

Earlier, the S&P 500 climbed as high as 1,297.57, its highest level since late May 2001 — a move that could herald further market gains, technical analysts said.

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The Nasdaq was buoyed by shares of SanDisk Corp. after Citigroup raised its rating on the memory products maker's stock to "buy" from "hold," according to a MarketWatch report Monday. SanDisk's stock jumped 8.4 percent to $61.08.

"Stocks have been following oil prices up and down," said Martin Yokosawa, senior portfolio manager at Oberweis Asset Management. "And in the meantime, if a company comes with strong numbers, investors stick to it."

"This may catapult the market higher, especially given the cheap valuations," said Tim Biggam, chief options strategist at Man Securities, a Chicago-based options brokerage firm.

U.S. crude for April delivery fell $1.91, or 3 percent, to settle at $61 a barrel on the New York Mercantile Exchange. Supplies from Saudi Arabia, the world's leading oil exporter, escaped disruption following Friday's unsuccessful suicide attack at the world's largest oil processing plant.

Shares of Lowe's, the second-largest home improvement retailer, rose 5.8 percent, or $3.78, to $69.30 on the New York Stock Exchange after it reported fourth-quarter earnings that beat Wall Street's estimates. Lowe's was among the S&P 500's major gainers.

The stock of Lowe's rival, Home Depot Inc. (HD), the largest home improvement retailer and a Dow component, climbed 2 percent, or 82 cents, to $42.45 on the NYSE. Home Depot ranked second among the Dow's biggest advancers.

Verizon's shares added 0.7 percent, or 25 cents, to $34.06 on the NYSE after it forecast 2006 operating earnings would be similar to 2005's, excluding costs related to its acquisition of MCI. .

Shares of Merrill Lynch & Co. (MER) gained 1.5 percent, or $1.12, to $77.88 on the NYSE after the investment bank said it will buy back as much as $6 billion of its outstanding stock.

But shares of home builders fell after a government report showed sales of new U.S. homes fell 5 percent in January to their slowest pace in a year.

The S&P home building index fell 1.8 percent, while shares of luxury home builder Toll Brothers Inc. (TOL) dropped 2.1 percent, or 69 cents, to $32.65 on the NYSE.

Trading was moderate on the NYSE, with about 1.44 billion shares changing hands, below last year's average of 1.62 billion. On Nasdaq, 1.75 billion shares traded, below last year's daily average of 1.80 billion.

Advancing stocks outpaced declining stocks by a ratio of about 10 to 7 on the NYSE. On Nasdaq, about three stocks rose for every two that fell.