The Standard & Poor's 500-stock index rose for a third day, led by energy shares including Exxon Mobil, as oil prices climbed again on concern that a promised Saudi Arabian production increase won't meet rising demand.
Oil prices "reflect stronger economies both here and in other countries," said Jack Holden, who oversees $1 billion in assets at Fort Washington Investment Advisors in Cincinnati. "Earnings growth is still strong" and "that will lead a rally in stocks" later this year, he said.
Altria Group, the parent company of Philip Morris USA, and R.J. Reynolds Tobacco Holdings declined after a judge denied U.S. cigarette makers' request to block the government from seeking to collect $280 billion.
The S&P 500 rose 1.85, or 0.2 percent, to 1095.41. The Dow Jones industrial average fell 8.31, or 0.1 percent, to 9958.43, dragged lower by Altria. The Nasdaq composite index increased 10.89, or 0.6 percent, to 1922.98.
Crude oil for July delivery jumped 4.5 percent to a record $41.72 a barrel on the New York Mercantile Exchange. An index that tracks oil and gas and oil-field services companies in the S&P 500 gained 1.5 percent, the biggest increase among the benchmark's 10 industry groups.
Exxon advanced 20 cents, to $42.80. ConocoPhillips, the No. 1 U.S. oil refiner, rose $2.08, to $72.55.
Altria fell $4.37, or 8.9 percent, to $44.95. The stock had its steepest decline since November 2002. R.J. Reynolds dropped $3.53, to $53.73. The judge's ruling will allow government lawyers to try to prove that Altria's Philip Morris and other producers should forfeit money they allegedly made from selling cigarettes to people who began smoking as children and then became addicted.
Excluding Altria's decline, the Dow average would have gained. Boeing, the No. 2 aircraft maker, had the biggest advance in the Dow. The stock rose $1.16, or 2.7 percent, to $44.56.
Alcoa, the world's biggest aluminum maker, advanced 72 cents, to $30.20.
Vicuron Pharmaceuticals, which develops treatments for infections, plunged $8.86, to $13.04. U.S. regulators are delaying approval of its anidulafungin medicine for fungal infections of the throat because the agency wants more data, the company said in a statement.
NeighborCare, a provider of pharmacy services to the long-term care industry, surged $10.24, or 58 percent, to $27.91. Omnicare made an unsolicited offer to buy NeighborCare for $30 a share, or $1.5 billion, including the assumption of debt. Omnicare rose $1.45, to $40.60.
* The New York Stock Exchange composite index rose 26.01, to 6334.13; the American Stock Exchange index rose 11.80, to 1185.86; and the Russell 2000 index of smaller-company stocks rose 5.91, to 551.72.
* Advancing issues outnumbered declining ones by 13 to 5 on the NYSE, where trading volume fell to 1.22 billion shares, from 1.26 billion on Friday. On the Nasdaq Stock Market, advancers outnumbered decliners by 5 to 3 and volume totaled 1.4 billion, up from 1.36 billion.
* The price of the Treasury's 10-year note rose $1.88 per $1,000 invested, and its yield fell to 4.74 percent, from 4.76 percent on Friday.
* The dollar rose against the Japanese yen and fell against the euro. In late New York trading, a dollar bought 112.72 yen, up from 112.20 late Friday, and a euro bought $1.2016, up from $1.2009.
* Light, sweet crude oil for July delivery settled at $41.72, up $1.79, on the New York Mercantile Exchange.
* Gold for current delivery rose to $385.60 a troy ounce, from $384.80 on Friday, on the New York Mercantile Exchange's Commodity Exchange.