Stocks Rise As Oil Tumbles

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Stocks finished higher Monday as investors digested a drop in crude oil futures and buzzing M&A news. But trading was slow ahead of a raft of economic reports this week that could determine the Federal Reserve's course at its Sept. 20 interest-rate meeting, says Standard & Poor's Equity Research.



The Dow Jones industrial average added 67.96 points, or 0.6%, to 11,352.01. The broader Standard & Poor's 500 gained 6.69 points, or 0.52%, to 1,301.78. The tech-heavy Nasdaq composite was up 20.41 points, or 0.95%, to 2,160.7.



NYSE breadth was decidedly positive, with 23 issues advancing for every 10 declining. Nasdaq breadth was 19-11 positive.



The economic calendar was light Monday, but traders should have their hands full later in the week. August consumer confidence and the minutes to the Fed's Aug. 8 monetary policy meeting will be up Tuesday. August payrolls highlight the weekly docket, while data releases are also due on consumer spending and personal income.



The week's data could bring some unwelcome inflation worries back to the fore, some analysts say. "Upcoming reports on GDP and consumer spending should reinforce the impression that U.S. growth has not yet dropped below the 3% rate that many see as its potential," says Jan Hatzius, chief U.S. economist at Goldman Sachs. "To markets that have bought heavily into our view that the Fed is done tightening, this week's firmer data could be unsettling."



From a technical perspective, stocks could be reaching the end of a cyclical bull market, others observe. "We believe another sign of a market top is when some indexes make new bull market highs while others lag," says Mark Arbeter, chief technical analyst at S&P. "The market may be approaching this scenario in the not too distant future, in our opinion."



In the energy markets, October West Texas Intermediate crude oil futures closed down $1.90 at $70.61 a barrel as Tropical Storm Ernesto appeared headed on a path to misses the sector of the region of the Gulf of Mexico rich in oil rigs and refineries.



On the company side, U.S. Steel (X) was lower after Prudential downgraded the stock from neutral to underweight as the steelmaker lowered its share price forecast.



Shares of Wal-Mart (WMT) rose after the retail giant said U.S. same-store sales rose about 2.7% in August, up from a 2.4% gain in July.



eBay (EBAY) was higher after the online auctioneer unveiled an advertising alliance with search behemoth Google (GOOG).



Chipmaker Intel (INTC) was higher after Friedman Billings Ramsey upgraded the stock from market perform to outperform.



M&A activity was also in focus. Energy transportation and storage company Kinder Morgan (KMI) agreed to a management-led buyout valued at about $22 billion, including $7 billion in debt assumption.



In other deal news, Western Refining (WNR) agreed to buy Giant Industries (GI) for about $1.5 billion, including about $275 million in debt assumption. The acquisition would create the fourth-largest publicly traded independent oil refiner in the U.S.



Also in energy, Oilgear (OLGR) agreed to be acquired by an affiliate of private equity firm Mason Wells at $15.25 per share.



In technology, Intervideo (IVII) agreed to be acquired by Corel Corp. in a $196 million deal.



European markets staged a late rally Monday. Germany's DAX index gained 43.52 points, or 0.75%, to 5,854.99. In Paris, the CAC 40 index added 37.39 points, or 0.73%, to 5,148.52. In London, the markets were closed for a holiday after the Financial Times-Stock Exchange 100 index on Friday rose 9.5 points, or 0.16%, to 5,878.6.



Asian markets ended lower. Japan's Nikkei 225 index slid 176.07 points, or 1.1%, to 15,762.59. In Hong Kong, the Hang Seng index lost 33.16 points, or 0.2%, to 16,922.29. Korea's Kospi index declined 1.46 points, or 0.11%, to 1,327.89.



Treasury Market



Treasuries were modestly lower in a quiet session for economic data. The 10-year note edged down in price to 100-20/32 for a yield of 4.8%, while the 30-year bond eased to 93-09/32 for a yield of 4.93%.