Stocks rise on GM deal, tobacco ruling

Wall Street rallied to finish moderately higher Monday as nervous investors got some reassurance from General Motors Corp.’s new labor agreement and a favorable court ruling for cigarette makers. Technology stocks rebounded ahead of three major profit reports.

GM’s tentative union deal calmed investors who feared worsening finances at the struggling automaker. The market also got a lift from strong quarterly earnings in the financial sector and the Supreme Court’s refusal to let the government pursue a $280 million racketeering penalty against tobacco firms.

The upbeat news helped offset rising crude oil, which added nearly $2 a barrel as a strengthening Tropical Storm Wilma posed yet another threat to the Gulf Coast region. A barrel of light crude climbed $1.73 to settle at $64.36 on the New York Mercantile Exchange.

Ed Peters, chief investment officer at PanAgora Asset Management, said that while corporate earnings have so far been positive, high oil and gas prices and continued speculation about the Federal Reserve’s interest rate-tightening campaign have been holding back the market.

“I think there’s still uncertainty about how far the Fed is going to go, and uncertainty about the effect of higher energy prices on the economy,” Peters said. “We’re seeing a modest bounceback, but it doesn’t seem to have a lot of conviction.”

At the close of trading, the Dow Jones industrial average gained 60.76, or 0.59 percent, to 10,348.10.

Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 3.53, or 0.3 percent, to 1,190.10, and the Nasdaq composite index added 5.47, or 0.26 percent, to 2,070.30.

Bonds stayed flat after last week’s selloff, with the yield on the 10-year Treasury note unchanged at 4.49 percent from late Friday.

Advancing issues outpaced decliners by 17 to 15 on the New York Stock Exchange, where preliminary consolidated volume of 2.04 billion shares lagged the 2.2 billion shares traded on Friday.

The Russell 2000 index of smaller companies finished up 0.22, or 0.03 percent, at 633.37.

Overseas, Japan’s Nikkei stock average fell 0.15 percent. Britain’s FTSE 100 was up 0.22 percent, Germany’s DAX index gained 0.07 percent, and France’s CAC-40 climbed 0.16 percent.