Stocks end higher, extending last week's gains

NEW YORK — Stocks ended higher Monday but well off their peak after crude oil prices pulled off their lows and the Federal Reserve said more banks are tightening lending standards.

The decline in oil since last month has eased investors' concerns about the drag of rising prices on the economy, but its move off its lowest levels Monday deflated a stock market rally that built upon steep gains last week. Light, sweet crude fell 75 cents to settle at $114.45 per barrel on the New York Mercantile Exchange after dipping to $112.72, its lowest price since early May.

The Fed's report reminded investors that the nation's credit situation is still deeply troubled. The central bank said about 75 percent of the banks it surveyed in July had increased requirements for prime mortgages, up from about 60 percent in April. The tighter standards can make it more expensive and difficult for borrowing that could stimulate the economy.

Falling oil prices and the continuing problems in the financial sector have competed for Wall Street's attention in recent sessions, with oil sending stocks higher and credit-related news tending to limit or halt the rallies.

Jim Hardesty, president of Hardesty Capital Management in Baltimore, said the decline in oil will take some pressure off the economy.

"We have a speculative bubble in prices that's giving way to what now I think are more moderate levels," he said, referring to oil's surge higher this year. "I think we can look forward to a resumption of an improvement in equity prices based on still-good earnings coming out of many companies."

According to preliminary calculations, the Dow Jones industrial average rose 48.03, or 0.41 percent, to 11,782.35, after being up more than 130 points. The gains Monday follow the blue chips' 300-point jump Friday.

Broader stock indicators also advanced Monday. The Standard & Poor's 500 index rose 9.00, or 0.69 percent, to 1,305.32. The Nasdaq composite index rose 25.85, or 1.07 percent, to 2,439.95, after names like Amazon.com Inc. jumped $7.58, or 9.4 percent, to $88.09 following release of upbeat comments from analysts.

Other consumer discretionary stocks rose as investors saw the drop in oil as likely to leave more cash consumers' wallets. That's a welcome prospect; consumer spending accounts for more than two-thirds of U.S. economic activity.

Target Corp. rose $2.49, or 5.1 percent, to $51.23, while Starbucks Corp. rose $1.18, or 7.8 percent, to $16.30.