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. The dollar was mixed against most major currencies, and gold prices edged lower.

With little economic data due today, investors were relying on the first wave of third-quarter earnings reports as a gauge on the economy and Gulf Coast recovery efforts following hurricanes Katrina and Rita. Wall Street will pay particular attention to fourth-quarter and 2006 forecasts for further signs of recovery — or trouble.

Bill Strazzullo, chief market strategist at State Street Global Markets, said that as earnings and forward-looking guidance unfold, he's looking for the S&P 500 to top 1,200 as an indication of whether Wall Street might see another rally.

"In the next week or so, we're going to see how the fourth quarter is shaping up," Strazzullo said. "I want to see the market show me it can gain traction above 1,200 again. I'd rather buy that strength than speculate now."

Tech investors received good news after the session, when International Business Machines Corp. said its third-quarter profit dipped but still beat Wall Street targets by 13 cents per share on strength in its services unit. IBM rose 24 cents to close at $82.59, and gained another $1.09 in after-hours activity.

Intel Corp. and Motorola Inc., also considered major barometers of the tech sector's health, are set to report earnings tomorrow. Intel climbed 23 cents to $23.46, while Motorola sank 22 cents to $19.94.

General Motors jumped $2.11 to $30.09 after the company said it reached a deal with the United Auto Workers to cut health care costs. However, the struggling automaker posted a $1.6 billion deficit for the third quarter, far greater than analysts had expected.

Wall Street has been worried about GM's finances for months. In May, downgrades of the automaker's debt rating and that of Ford Motor Co. sent an already shaky stock market even lower. The anxiety increased this month when parts supplier Delphi Corp., a former GM unit, filed for bankruptcy.

The Supreme Court ruling sent shares of tobacco companies surging, with Phillip Morris USA parent Altria Group Inc. rising $4.30 to $74.96, and rival Reynolds American Inc. adding $5.06 to $83.80.

In the financial sector, Citigroup saw a 35 percent jump in quarterly profit, due in part to the sale of its life insurance and annuities businesses. Without one-time charges, the company beat analysts' estimates by 4 cents per share. Nonetheless, Citigroup gave back earlier gains and fell 23 cents to $44.81.

Wachovia Corp. gained 27 cents to $48.12 after the bank posted a 32 percent rise in earnings on strong revenue growth from lending and increased fees, as well as its recent acquisition of SouthTrust Corp.

Charles Schwab Corp. posted its largest quarterly profit since the dot-com era, reversing a year-ago loss on sturdy asset growth. The discount brokerage beat Wall Street targets by a penny per share. Schwab rose 21 cents to $13.34.

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.