Stocks up day, down quarter
Wall Street pushes higher on the last day of a brutal first quarter, thanks to falling oil prices and the Bush Administration's proposed overhaul of financial regulation.
NEW YORK (CNNMoney.com) -- Falling oil prices helped lift stocks Monday, at the end of an otherwise abysmal quarter on Wall Street, marred by fears of a recession amid the housing crisis and credit market fallout.
The Bush Administration's proposed financial regulation overhaul and a big setback for drugmakers Schering-Plough and Merck were among the day's big stories.
The Dow Jones industrial average (INDU) added 0.4%. The broader Standard & Poor's 500 (SPX) index gained 0.6% and the Nasdaq composite (COMP) gained 0.8%.
The gains were likely some classic end-of-quarter "window dressing," with portfolio managers buying up winners at the end of a brutal first-quarter, said Paul Mendelsohn, president at Windham Financial Services. (Full story)
The Dow lost 7.6% in the quarter, the S&P 500 gave up just short of 10% and the Nasdaq lost just over 14%.
Stocks have tanked this year on worries about a sluggish economy and corporate earnings amid the fallout in housing and the credit markets. Significant information about the economy is due later this week, keeping the concerns front and center.
Tuesday brings the ISM manufacturing index, Thursday brings the ISM services sector index and Friday brings the monthly jobs report.
"This is going to be a difficult, volatile week," Mendelsohn said. "You have probably the most important reports of the month coming out and they are going to tell you everything you need to know about the economy and a recession."
Looking forward, the second quarter could bring some improvement, although Wall Street is likely to see another leg down first and more daily whipsawing, said Tom Schrader, managing director at Stifel Nicolaus.
"Nobody likes a bear market and the volatility has just been a killer for a lot of us," Schrader said.
Commodity prices plummet. Stocks slipped for three straight sessions, before pushing higher Monday.
In addition to the quarter-end moves, investors were also likely responding to falling commodity prices.
"I think what's helping a great deal is that crude oil and other commodity prices are down, which is anti-inflationary," Schrader said.
U.S. light, crude oil for May delivery slumped $4.04 to settle at $101.58 a barrel on the New York Mercantile Exchange, adding to a drop of almost $2 a barrel on Friday.
COMEX gold for April delivery fell $14.40 to settle at $916.20 an ounce.
Paulson plan. Treasury Secretary Henry Paulson introduced the Bush Administration's proposed overhaul of the financial system, which includes expanding the Federal Reserve's power to manage the type of extreme credit crisis currently dragging on the economy. (Full story).
The plan provoked a wide range of responses from Wall Streeters. Schrader said that he's doubtful that the stock market will respond much to the proposals as it's unclear if they will ever be adopted.
Mendelsohn said he's doubtful as to how much difference the changes might make even if they are adopted. "My feeling is they're rearranging the deck chairs on the Titanic," he said.
Housing and Urban Development Secretary Alphonso Jackson announced Monday that he is resigning. Jackson is in the midst of a criminal investigation at the same time the housing crisis rages on. (Full story).
And on the economic front, the Chicago PMI, a regional read on manufacturing, rose to 48.2 from 44.5 in the previous month, topping forecasts for a rise to 46.0. While the report showed improvement, any reading below 50 still suggests contraction in the sector.
Company news. Shares of Merck (MRK, Fortune 500) and Schering-Plough (SGP, Fortune 500) slumped on another setback for their joint cholesterol treatment Vytorin. Researchers said Vytorin was no more effective in battling heart disease than older, less expensive drugs, including Merck's Zocor, which is available generically.
Citigroup (C, Fortune 500) said it will split its consumer banking unit from its credit card business as part of its ongoing reorganization efforts and attempts to cut costs. The company has lost billions of dollars related to bad mortgage bets. Shares inched higher.
Lehman Brothers (LEH, Fortune 500) inched higher on news that it is suing Japanese trading house Marubeni for fraud over a scam that cost Lehman $352 million.
Chipmaker Micron Technology (MU, Fortune 500) jumped over 9% ahead of its quarterly earnings announcement, due out Wednesday.
Other tech gainers included Intel (INTC, Fortune 500), Microsoft (MSFT, Fortune 500) and Dell (DELL, Fortune 500).
Market breadth was positive. On the New York Stock Exchange, winners beat losers by over three to two on volume of 1.58 billion shares. On the Nasdaq, advancers topped decliners by a similar margin on volume of 1.82 billion shares.
Other markets. The dollar rose versus the euro and the yen.
Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 3.41% from 3.44% late Friday. Bond prices and yields move in opposite directions. 
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