US stocks rose sharply on Monday as oil prices fell more than 3 percent and Wal-Mart Stores Inc forecast monthly sales near the top end of its estimates. However, trading volume was light as many portfolio managers were away on vacation.
The Nasdaq briefly rose more than 1 percent. An upgrade of Intel Corp and a partnership between Internet companies eBay Inc and Google Inc lifted the technology sector.
US crude oil futures for October delivery dropped $2.21 to $70.30 a barrel after Tropical Storm Ernesto was forecast to miss oil installations in the Gulf of Mexico and was downgraded from a hurricane.
"Crude being off $2 is certainly helping matters. Everybody had geared themselves up for this horrible hurricane season, and it's just not happening," said Mike Driscoll, Bear Stearns listed trader and managing director. "There are no sellers around ... it's the week before Labour Day," he added.
The Dow Jones industrial average was up 71.56 points, or 0.63 percent, at 11,355.61. The Standard & Poor's 500 Index was up 7.39 points, or 0.57 percent, at 1,302.48. The Nasdaq Composite Index was up 18.31 points, or 0.86 percent, at 2,158.60, after trading as high as 2,162.99.
Shares of industrial companies United Technologies Corp, Caterpillar Inc and 3M Co rose as lower oil prices raised the prospect of lower costs and higher profits.
United Technologies climbed 1.5 percent to $61.59, Caterpillar gained 0.9 percent to $66.56 and 3M added 1.4 percent to $70.88, all on the NYSE.
Volume on the New York Stock Exchange was a light 614 million shares. Shares of Wal-Mart rose 1.3 percent to $44.44 after the retailer over the weekend estimated that August sales rose 2.7 percent at its US stores open at least a year, near the high end of its forecast.
The stock of eBay shot up nearly 2 percent to $25.79 and Google shares advanced 1.7 percent to $379.50 on the Nasdaq. Shares of Intel Corp rose 1.8 percent to $19.24 after Friedman Billings Ramsey upgraded the blue chip semiconductor maker, theflyonthewall.com, a financial information Web site, reported.