Major stock indexes finished with modest gains Monday after being lower for much of the session as crude oil prices fell toward the $57 a barrel level, according to Standard & Poor's MarketScope. Insurer American International Group (AIG) closed higher on reports that New York Attorney General Elliot Spitzer sees a civil resolution to his investigation into the company's transactions. Basic materials stocks, as well as precious metals futures, were lower.
On Monday, the Dow Jones industrial average gained 16.84 points, or 0.16%, to 10,421.14. The broader Standard & Poor's 500 index edged up 3.2 points, or 0.27%, to 1,176.12. The Nasdaq composite index added 6.26 points, or 0.32%, to 1,991.07.
Looking ahead to Tuesday, two reports on weekly retail sales will be released. No major earnings reports are scheduled.
In early morning trading Monday, oil prices climbed to record highs of $58.28 before easing, as OPEC ministers began consulting on increasing production quotas in order to cool the market. Nymex oil settled down 0.45% at $57.01.
In corporate news, AIG rose 5% and boosted its peers after Spitzer said that the company is cooperating with the investigation into its financial transactions. He added that a civil resolution is "achievable".
Morgan Stanley (MWD) remained in the spotlight, as Dow Jones Newswires reported that the brokerage house's board of directors had authorized the sale of its Discover Card credit division. Earlier, Britain's Independent on Sunday reported that HSBC Holdings (HBC) is considering a $75 billion bid Morgan Stanley. The company's shares closed 2.9% higher.
Oil major ChevronTexaco (CVX) announced Monday that it is buying rival Unocal (UCL) for about $16.4 billion in cash and stock, which is below Friday's closing price. As part of the deal, ChevronTexaco will also assume $1.6 billion in debt. ChevronTexaco was down 3.8%, while Unocal dropped 7.4%.
Struggling doughnut maker Krispy Kreme (KKD) said Monday that it had obtained $225 million in new financing in a deal arranged by Credit Suisse First Boston and Silver Point Finance LLC. Its shares rose 2%.
Fannie Mae (FNM) was down 3.3% on reports that regulators are looking at how the government-sponsored mortgage company has accounted for trusts it set up to sell securities.
In earnings news, men's clothing retailer Jos. A. Bank (JOSB) reported preliminary fiscal fourth-quarter earnings of 88 cents per share, compared to 68 cents in the period last year. Analysts were expecting average earnings of 83 cents a share. The company's stock rose 5.7%.
At the end of the session Monday, Treasury prices were mixed, with the yield on the benchmark 10-year note at 4.46%. On Saturday St. Louis Federal Reserve Bank President William Poole warned of risks of higher inflation over next six months or so.
European stock markets closed lower on Monday. London's Financial Times-Stock Exchange 100 index was down 17.30 points, or 0.35%, to 4,896.70.
Germany's DAX index fell 32.14 points, or 0.73%, to 4,341.39.
In Paris, the CAC 40 index dropped 27.76 points, or 0.68%, to 4,052.32.
Asian markets finished mixed on Monday. In Japan, the Nikkei 225 index fell 56.09 points, or 0.48%, to 11,667.54.