Stocks ended a volatile session moderately higher Monday as investors eyed soaring oil prices and the pending retirement of beleaguered Morgan Stanley Chief Executive Philip J. Purcell ahead of key economic reports this week.
Crude oil prices surged $2.98 to $55.62 a barrel in New York trading, in advance of this week's OPEC meeting. Members are expected to raise their daily output quota by half a million barrels, but analysts said the move was largely symbolic and would do little to ease prices -- now at a seven-week high.
Bond yields continued to rise, with the 10-year U.S. Treasury note rising to 4.09%, from 4.05% on Friday, on expectations of additional interest rate hikes by the Federal Reserve.
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. The euro fell to $1.209 from $1.212 on Friday.
With inflation and retail sales figures expected today and Wednesday, stock market investors were wary of making big commitments.
"Morgan Stanley probably had some positive effect on the market, but the fact remains we have an extremely heavy data week ahead," said Scott Wren, equity strategist for A.G. Edwards & Sons. "I think the market wants to go up, it's becoming more and more convinced inflation will remain low, and growth, while slowing, will still be pretty good. On a day like today, given what we have ahead of us, it'll be tough to make any real headway."
The Dow Jones industrial average rose 9.93 points, or 0.09%, to 10,522.56, an improvement after the index dipped into negative range, but well off the day's high of 10,589.16. After being stuck in a tight trading range for weeks, the Dow showed unusual volatility, swinging 115 points between its session high and session low.
Broader stock indicators also gave up earlier gains, but closed modestly higher. The Standard & Poor's 500 index was up 2.71 points, or 0.2%, at 1,200.82. The Nasdaq composite index added 5.96 points, or 0.3%, to 2,068.96.
Investors have been greatly preoccupied with the effect higher energy prices are having on inflation and consumer spending. The Labor Department's May producer price index, a measure of wholesale prices and an indicator of inflation, was due out today. The closely watched consumer price index, 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."
In other market highlights:
* Morgan Stanley climbed $1 to $50.88, after the announcement that Purcell had lost his battle to hold his post in the face of external criticism and an exodus of talent.
* Hamburger chains McDonald's and Wendy's International retreated on concern a second possible case of mad cow disease in the U.S. might slow beef and hamburger sales. Tissue from the suspected animal is being tested by a laboratory in Weybridge, England, and the results are expected this week, the U.S. Department of Agriculture said Friday.
McDonald's fell 42 cents to $29.11, for the biggest loss in the Dow average. Wendy's dropped $1.12 to $46.78 for the S&P 500's second-steepest decline.
* Gold prices in New York rose $1.90 to $429.30, as investors bought the precious metal as an alternative to both the euro and dollar. Newmont Mining, the world's largest gold producer, added 46 cents to $38.53. Freeport-McMoRan Copper & Gold, owner of the world's largest gold mine, gained 26 cents to $35.99.
* Sirius climbed 34 cents, or 6%, to $5.99 for its biggest advance this quarter. The satellite radio company created a technology to increase network capacity by 25% to add channels and narrow the gap with larger competitor XM Satellite Radio Holdings. XM added $1.18 to $32.34.
* Electronic Arts, the largest U.S. publisher of video games, rose $4.50, or 8.4%, to $58, on speculation the Redwood City, Calif., company may buy the 80% of French game maker UbiSoft Entertainment it doesn't own.