NEW YORK (CNNMoney.com) -- Stocks posted solid gains Monday after oil prices slumped and upbeat corporate news lifted the tech sector.

The Nasdaq composite (up 20.41 to 2,160.70, Charts) rose for the third straight session, gaining nearly 1 percent while the Dow Jones industrial average (up 67.96 to 11,352.01, Charts) rose 0.6 percent. Earlier in the session, the Dow hit 11,387 - its highest intraday level in three months.

Special Reportfull coverage America's cheapest gas is in this town Summer drivers to get a break on gas Why gas prices are likely to keep climbing You'll pay a little less for gas this summer Expect relief from record February gas prices Why gas prices are rising

The broader S&P 500 (up 6.69 to 1,301.78, Charts) index was up 0.5 percent.

Oil prices sank as Hurricane Ernesto was downgraded to tropical storm status and forecasts suggested it will miss oil facilities in the Gulf of Mexico and hit South Florida instead.

U.S. light crude fell $1.90 to $70.61 a barrel on the New York Mercantile Exchange.

Investors are focused on the price of oil so the market is doing a little bit better today, according to Hugh Johnson, chairman of asset management company Johnson Illington Advisors.

"Today the news was good, but who knows that tomorrow will bring," he cautioned.

On Tuesday, traders will turn their attention to the release of minutes from the Fed's August 8 meeting and the August report on Consumer Confidence.

Energy stocks, including Dow component Exxon Mobil (down $0.33 to $70.10, Charts), fell in afternoon trade.

A management group bidding to take Kinder Morgan (up $2.57 to $104.27, Charts) private raised its bid for the oil and gas pipeline company to $107.50 a share, or $15 billion. The group had previously offered $100 a share May 29, but the stock has been trading above that level since late June. The board of the company accepted the new offer Monday, sending shares of Kinder Morgan up 2.5 percent.

Internet auction site eBay (up $0.49 to $25.79, Charts) and search engine Google (up $7.69 to $380.95, Charts) announced early Monday they have signed a deal allowing Google to exclusively display text advertisements on eBay's auction Web sites outside the U.S. Shares of both companies rose 2 percent higher.

Also giving the Nasdaq a boost, Amazon.com (up $0.88 to $28.91, Charts) said its board of directors authorized the company to buy back up to $500 million in common stock, and Friedman Billings Ramsey's Chris Caso upgraded Intel (up $0.48 to $19.38, Charts) to "Outperform" from "Market Perform."

After the closing bell, Restoration Hardware (up $0.02 to $6.14, Charts) jumped 15 percent after the retailer reported second-quarter results.

FedEx (up $1.75 to $100.90, Charts) rose nearly 2 percent after the package delivery company announced Sunday it had reached an agreement with the Air Line Pilots Association on a tentative four-year labor pact, after two years of negotiations.

Ford Motor (up $0.05 to $8.05, Charts) was also higher after the No. 2 automaker said it was considering selling a "significant stake" in its Ford Credit financing arm as part of a sweeping restructuring, according to the Detroit News.

Dow component Wal-Mart Stores (up $0.55 to $44.43, Charts) rose over 1 percent, a day after the retail giant estimated that August sales rose 2.7 percent at its U.S. stores open at least a year, near the high end of its forecast.

Of the 30 stocks in the Dow, 25 rose and five fell.

Market breadth was positive. On the New York Stock Exchange, winners beat losers more than two to one on volume of 1.2 billion shares. On the Nasdaq, advancers beat decliners also by three to two as 1.4 billion shares changed hands.

Volume is expected to be light leading up to Labor Day.

On the economic front, a key inflation reading in the personal income and spending report is due Thursday and a revision to second-quarter economic growth is due Wednesday. Friday comes the big number of the week: The closely watched August employment report, as well as readings on a key manufacturing index and auto sales.

The Federal Reserve is expected to keep interest rates unchanged again next month and investors are eager to get any clues about the Fed's policy movements beyond its Sept. 20 decision.

Treasurys fell following last week's rally, lifting the yield on the 10-year Treasury to 4.79 percent from 4.78 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar was lower against both the euro and the yen.

Gold prices fell $6.90 to $623.90 an ounce.

Watch market activity