With inflation and retail sales figures expected tomorrow and Wednesday, investors were wary of making big commitments, and pricey oil capped the session's advance. The expectation of good economic news lent a definite upside bias to stocks, and Wall Street's favorable reaction to Morgan Stanley's announcement contributed to the market's good humor. But analysts were reluctant to assign too much significance to the day's trading.

"Morgan Stanley probably had some positive effect on the market, but the fact remains we have an extremely heavy data week ahead," said Scott Wren, equity strategist for A.G. Edwards & Sons. "I think the market wants to go up, it's becoming more and more convinced inflation will remain low, and growth, while slowing, will still be pretty good. On a day like today, given what we have ahead of us, it'll be tough to make any real headway."

The Dow Jones industrial average rose 9.93, or 0.09 percent, to 10,522.56, an improvement after the index dipped into negative range, but well off the day's high of 10,589.16. After being stuck in a tight trading range for weeks, the Dow showed unusual volatility, swinging 115 points between its session high and session low.

Broader stock indicators also gave up earlier gains, but closed modestly higher. The Standard & Poor's 500 index was up 2.71, or 0.23 percent, at 1,200.82. The Nasdaq composite index added 5.96, or 0.3 percent, to 2,068.96.

Bonds continued last week's sell-off, with the yield on the 10-year Treasury note rising to 4.09 percent, up from 4.05 percent late Friday. The dollar climbed to nine-month highs against the euro and the Japanese yen thanks to a better-than-expected U.S. trade deficit, reported Friday. Gold prices also rose.

Oil prices spiked higher ahead of this week's OPEC meeting; members are expected to raise their daily output quota by half a million barrels, but analysts said the move was largely symbolic, and would do little to ease prices. Light crude for July deliver surged $2.08 to settle at $55.62 per barrel on the New York Mercantile Exchange, a seven-week high.

Investors have been greatly preoccupied with the impact higher energy prices are having on inflation and consumer spending. The Labor Department's May Producer Price Index, a measure of wholesale prices and an indicator of inflation, was due out tomorrow. The closely watched Consumer Price Index, which measures retail prices, comes out Wednesday.

"All the talk has been about, 'Are we coming out of a soft patch?' For me, it's very obvious we're coming out of the soft patch, because if we weren't, the market, as it anticipates developments, would be well into a downtrend," said Ken Tower, chief market strategist for Schwab's CyberTrader. "I think it's clear the market is anticipating better economic numbers going forward. And I think we'll get evidence of that tomorrow."

Meanwhile, word of Purcell's pending departure intensified focus on the financial sector, which accounts for more than 20 percent of the S&P 500, especially as investment bankers Lehman Bros., Bear Stearns and Goldman Sachs Group prepared to release earnings later this week.

Morgan Stanley climbed 2 percent, or $1.00, to $50.88, following the announcement that Purcell had lost his battle to hold his post in the face of external criticism and an exodus of talent. The company also warned that its second-quarter earnings would be 15 percent to 20 percent lower than expected due to difficult market conditions in the quarter.

The Boeing Co. lost out on a major order as Qatar Airways opted to purchase up to 60 Airbus A350 instead of Boeing's 787 Dreamliner. The two aircraft makers will be vying for orders this week at the Paris Air Show. Boeing shed 2 cents to $64.63.

Stun-gun maker Taser International Inc. rose 3.5 percent, or 38 cents, to $11.22, after announcing a $1.4 million dollar order from the military for non-lethal weapons. The company, which had 2004 sales of about $68 million, will ship the order in the second quarter.

Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange. Preliminary volume came to 1.27 billion shares, compared with 1.25 billion traded at the same point Friday.

The Russell 2000 index of smaller companies was up 2.69, or 0.43 percent, at 629.02.

Overseas, Japan's Nikkei stock average rose 0.06 percent. In Europe, France's CAC-40 gained 0.46 percent, Britain's FTSE 100 was up 0.40 percent and Germany's DAX index added 0.29 percent.