Stocks up as oil price drop eases inflation fears

Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.80 percent from 3.78 percent late Friday. After an early strong start, the dollar ended mixed against most other major currencies, while gold prices fell.

The flow of first-quarter earnings reports is beginning to dwindle, so Wall Street will likely require some big news on the economy -such as a sharp reversal in commodities prices -to dislodge the markets from their current position, said Ted Oberhaus, director of equity trading at Lord, Abbett & Co.

"We're the majority of the way through the earnings season and it has been relatively productive. With that as a backdrop, I would expect a range-driven appreciation over the next few months," Oberhaus said.

Hewlett Packard Co. fell $2.49, or 5.1 percent, to $46.64 after the technology company confirmed it is in talks with Electronic Data Systems Corp. about a possible acquisition. Shares of EDS spiked $5.27, or 28 percent, to $24.13.

MBIA Inc. posted a $2.41 billion first-quarter loss, as the struggling bond insurer took heavy charges to write down the value of liabilities amid continued deterioration in the credit markets. The stock rose 47 cents, or 5 percent, to $9.90 following comments from the company on the strength of its balance sheet.

Research In Motion Ltd. rose $8.93, or 6.7 percent, to $141.70 as the handheld electronics maker introduced its first major new BlackBerry model in more than a year.

Investors will be looking to other readings on consumers this week to determine the toll rising energy costs might be having. Government figures are due on retail sales in April. And retailers including Wal-Mart Stores Inc., Macy's Inc., JCPenney Co. and Kohls Corp. are due to report first-quarter results.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to a light 1.01 billion shares.

The Russell 2000 index of smaller companies rose 13.18, or 1.83 percent, to 733.23.

Overseas, Japan's Nikkei stock average rose 0.64 percent. Britain's FTSE 100 rose 0.26 percent, Germany's DAX index rose 0.47 percent, and France's CAC-40 rose 0.32 percent.