Updated from 4:04 p.m. EDT
Stocks closed higher Monday while oil spiked and the year's biggest merger drama approached resolution.
Dow Jones Industrial Average
rose 59.19 points, or 0.6%, to 10,251.70, while the
added 5.31 points, or 0.5%, to 1162.16. The
, meanwhile, gained 7 points, or 0.4%, to 1928.65. The 10-year Treasury note was down 3/32 in price to yield 4.19%, while the dollar was higher against the yen and euro.
Stocks had been modestly higher for much of the first half of the day, but added to their gains in the afternoon.
said it was abandoning the battle for
, leaving the long-distance company in the hands of
. Earlier, Verizon raised its buyout offer for MCI to $26 a share in cash and stock.
Qwest tacked on 5 cents to $3.47, while MCI lost 83 cents to $25.70 and Verizon fell 2.3% to $34.97.
Dave Briggs, head of equity trading with Federated, said the morning's action looked technical in nature, with stocks running out of steam as the S&P hit its "fulcrum point" at around 1163, the top of its trading range in 2004.
"We're going to be bouncing around here a little bit while everyone waits for the
decision tomorrow," Briggs said. "I don't think there are going to be any surprises, but people are using it as an excuse to continue the bull-bear debate that we've seen the last few sessions."
Briggs, like most market watchers, expects the Fed to stick to its measured pace of raising interest rates by a quarter-point for the eight month in a row.
Stocks were supported by the Institute for Supply Management's manufacturing index, which fell slightly to 53.3 in April but remained above 50, which indicates expansion. The index's price component came in below economists' forecasts. Also, the government said construction spending increased more than expected in March, up 0.5%, matching the pace set in February.
Stocks are coming off a choppy week in which a lackluster GDP report sent the averages to fresh 2005 lows Thursday before plunging oil sparked a 122-point rally on the Dow on Friday. For the week, the Dow added 35 points, while the S&P 500 gained 5 points and the Nasdaq Composite fell 11 points.
On Monday, the June oil contract got a lift when an official of the International Energy Agency said last week's price declines could prove temporary.
In corporate news, directors of
reiterated their commitment to CEO Phil Purcell and said they wouldn't consider splitting up the company, rejecting the main demands of dissident shareholders. The stock fell 6.1% to $49.41.
American International Group
updated its accounting review, saying mistakes in past periods probably will result in a $2.7 billion reduction to its net worth -- about $1 billion more than previously believed. The company again delayed the filing of its 2004 10-K with the
Securities and Exchange Commission
Elsewhere, luxury retailer
agreed to be acquired by private equity firms Texas Pacific and Warburg Pincus for about $5 billion.
finally posted results for its fourth quarter of 2004, saying earnings fell about 75% from a year ago to $133 million, or 3 cents a share. Revenue in the quarter was $2.6 billion, down from $3.27 billion a year ago. The company said first-quarter revenue should rise modestly from a year ago.