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NEW YORK (CNN/Money) -
Stocks rose Monday as investors welcomed signs that the worst of Hurricane Katrina appears to have passed.
As of 5:30 p.m. ET, Nasdaq and S&P futures pointed to a flat open Tuesday when fair value is taken into account.
The Nasdaq composite (up 16.88 to 2,137.65, Charts) added 0.8 percent.
The Standard & Poor's 500 (up 7.18 to 1,212.28, Charts) index and the Dow Jones industrial average (up 65.76 to 10,463.05, Charts) both gained around 0.6 percent.
All three major gauges had posted losses at the open and had struggled through the early afternoon before turning higher.
Treasury prices inched higher, lowering yields and the dollar gained versus other major currencies.
Hurricane Katrina continued to rage through the Southeast, but nonetheless was downgraded to a category 2 storm from a category 4 this morning.
"While it's too soon to tell exactly what the damage is, I think the market had priced in even more damage to the oil infrastructure than what seems to have taken place," said Tom Schrader, managing director of U.S. equity trading at Legg Mason.
Once it became clear that the damage was not as bad as had been feared, oil prices came back down and that allowed stock prices to rise, Schrader added.
Oil prices had initially jumped to a record trading high of $70.80 a barrel in electronic trading, as Katrina churned through the Gulf of Mexico, where a quarter of all U.S. oil production takes place. However, prices eased amid the downgrading of the storm and news that the Department of Energy may release oil from the Strategic Petroleum Reserve if needed.
U.S. light crude oil for October delivery rose $1.07 to settle at $67.20 a barrel on the New York Mercantile Exchange.
Looking ahead, "it's a big week for economic news," said David Briggs, head of equity trading at Federated Investors.
Tuesday's biggest potential market mover is the August consumer confidence report from the Conference Board, The report is likely to show a weakening due to the run up in oil prices, Briggs added.
A report on July factory orders is also due Tuesday morning. The meeting minutes from the August 9 Federal Reserve interest-rate policy-setting meeting are due Tuesday afternoon.
General Motors is also holding a meeting with analysts Tuesday.
On the move
Among stock movers, oil and gas stocks remained upbeat, but were off the highs of the session. The Amex Oil (up 11.01 to 966.38, Charts) index gained over 1 percent, retreating some after posting bigger gains in the morning.
Gainers included Halliburton (up $0.54 to $57.80, Research) and Chesapeake Energy (up $0.78 to $28.89, Research).
Capstone Turbine (up $0.39 to $4.58, Research), a maker of generators for on-site power production, jumped almost 10 percent in unusually active Nasdaq trade.
Global Industries (up $1.38 to $12.02, Research), which provides construction and support services for offshore oil operations, gained 13 percent.
Home improvement retailers also rose as investors bet the chains would see a bounce in business in the Southeast after the hurricane. Home Depot (up $0.73 to $40.54, Research) and Lowe's (up $1.42 to $64.60, Research) both gained.
A variety of tech stocks bounced, recovering after having been hit recently. The Nasdaq composite fell for the last four weeks in a row.
IBM (up $0.96 to $81.34, Research), Intel (up $0.32 to $25.73, Research) and Cisco Systems (up $0.24 to $17.64, Research) all gained.
A variety of health care and biotech stocks rose, including Dow components Merck (up $0.46 to $28.12, Research) and Johnson & Johnson (up $1.07 to $63.01, Research).
Among other movers, PanAmSat Holding (up $4.00 to $23.80, Research) jumped 20 percent in active New York Stock Exchange trade after saying that it had agreed to be bought by privately-held Intelsat Ltd. for $3.2 billion in cash, a 25 percent premium over Friday's stock price close.
The deal creates the world's largest commercial satellite fleet, the companies said.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by five to three on volume of 1.22 billion shares. On the Nasdaq, advancers beat decliners by more than four to three on volume of 1.25 billion shares.
Treasury prices rose modestly, giving back bigger earlier gains. The advance lowered the yield on the 10-year note to 4.17 percent from 4.18 percent late Friday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar was higher versus the euro and the yen.
COMEX gold rose 70 cents to settle at $441.40 an ounce.
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