U.S. Stocks Open Higher Lifted By Oil Shares

NEW YORK (MarketWatch) -- U.S. stocks opened mostly higher in light trade Monday as rising oil prices lifted energy shares, offsetting news that Kuwait scrapped plans for a $17.4 billion joint venture with Dow Chemical.

Oil was the main focus Monday after a second day of strong gains pushed the February light crude contract back above $40 a barrel.

Rising tension in the Middle East pushed the contract higher as Israeli air strikes in the Gaza Strip continued and the country's Defense Minister Ehud Barak reportedly said it was fighting a "war to the death" with Hamas.

Light crude for February delivery rose $2.24, or 6%, to $39.89 a barrel in electronic trading, having reached $42.20 earlier in the day.

The Dow Jones Industrial Average gained 4 points, or 0.1%, to 8,521, with 16 of its 30 components advancing, led by shares of Exxon Mobil , Chevron Corp. , and Alcoa Inc. .

The S&P 500 index fell 0.4 points to 872, while the Nasdaq Composite fell 2.5 points to 1,527.

U.S. stocks ended higher in light trading Friday, led by gains in energy shares, with retailers also in focus as post-Christmas sales began in earnest. The Dow Jones Industrial Average closed up 47 points, the S&P 500 gained 7.4 points and the Nasdaq Composite advanced 5.3 points.

In other oil-related news, Kuwait said Sunday that it is terminating plans for its $17.4 billion joint venture with Dow Chemical Co. amid political opposition.

Forming the venture -- known as K-Dow -- would have given the chemicals giant access to lower-cost petroleum and was a key part of CEO Andrew Liveris' strategy for the group. But the deal was reportedly heavily criticized by Kuwaiti lawmakers.

Shares in Dow Chemical slumped more than 18%.

The move could also raise questions over Dow's planned acquisition of Rohm & Haas , which reportedly was to be partly funded by the money received from Kuwait. Rohm & Haas noted in a brief statement Monday that the completion of the K-Dow deal wasn't a requirement of its takeover. Rohm & Haas shares fell 22%.

With little on the economic calendar, the dollar weakened against both the euro and the yen. The euro rose 1.8% at $1.4273, while the greenback fell 0.6% against the yen at 90.24 yen.

In international markets, Japan's Nikkei 225 rose 0.1% and the French CAC 40 index climbed 1.3%.

By Nick Godt