U.S. Stocks Get Opening Lift As Oil Falls More Than $4 A Barrel

NEW YORK (MarketWatch) -- U.S. stocks on Monday began solidly higher, with investor enthusiasm about oil price relief and dollar strength helping offset caution about second-quarter earnings season.

"This week's earnings results mark the official start of the earnings season, but outside of General Electric, investors are mainly focusing on the banks and the credit crisis," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.

The Dow Jones Industrial Average climbed 82.4 points to 11,370.94. with the blue-chip index's advance led by General Motors Corp. , up 4%, with shares of the biggest U.S. automaker bolstered by crude's fall and a Wall Street Journal Report that GM is considering more job cuts and whether to close more brands.

The S&P 500 gained 7.95 points to 1,270.85, while the Nasdaq Composite added 27.07 points to stand at 2,272.45.

Helping lift the technology sector, Microsoft Corp. said it is open to discussing a "major transaction" with a new board of directors at Yahoo Inc. .

Shares of Microsoft gained 0.9% while Yahoo soared 9.3%.

U.S. stocks ended lower during the holiday-shortened week, with the Dow Jones Industrial Average falling into bear-market territory.

Monday's economic calendar was light, with a speech from non-voting San Francisco Fed President Janet Yellen the highlight.

The dollar put on sizeable gains against the Japanese yen and the British pound, and oil futures dropped, with the August contract losing $4.39 to $140.90 a barrel. .

The Journal also reported Merrill Lynch & Co. is inching closer to selling ownership stakes in investment manager BlackRock Inc. and information provider Bloomberg LP.

"The still-distressed state of balance sheets at banks and other financial intermediaries suggests the credit creation mechanism is likely to remain impaired for the near future, dulling the impact of Fed rate cuts on the economy," said Lehman Brothers analyst Zach Pandl.

And, General Electric Co.'s NBC Universal led a group buying the Weather Channel in what is expected to be a multi-billion-dollar deal. Terms weren't disclosed.

Germany's Fresenius said it's going to buy APP Pharmaceuticals Inc. for up to $4.6 billion.

InBev announced a rival slate of directors for Anheuser-Busch Companies Inc. that includes Adolphus Busch IV, the uncle of the Budweiser maker's chief executive, August Busch IV.

Merck & Co. Inc. was downgraded to neutral from buy at UBS, while another top drugmaker, AstraZeneca plc , separately was downgraded to hold by Deutsche Bank.

Milwaukee bank Marshall & Ilsley Corp. warned of a provision of at least $900 million in the second quarter to cover loan losses from the slumping housing market.

Teva Pharmaceutical Industries Ltd. shares were as much as 6.8% lower in Tel Aviv after the company said that in a Phase III study, a 40-milligram dose of its Copaxone multiple-sclerosis treatment was no more effective in reducing the relapse rate than the approved 20mg dose.

Overseas, the Nikkei 225 ended a 12-session losing run with a 0.9% rise. In London, the FTSE 100 rose 0.9% in afternoon trade.

By Kate Gibson