Stocks gained yesterday as a surge in oil prices failed to outweigh optimism that government reports this week will show economic growth is robust enough to sustain the market's seven-week rally.

"The economy feels relatively strong and stocks are going to be a good thing to own," said Evan Olsen, head trader at Stephens Inc. in Little Rock, Ark. "The market's gaining some momentum and portfolio managers are seeing that they need to get involved."

Morgan Stanley, the world's largest securities firm, advanced after saying chief executive Philip J. Purcell will step down following a two-month campaign by former executives to oust him. Sirius Satellite Radio, the No. 2 pay-radio company, rallied on the company's plan to create technology to add more channels.

The Standard & Poor's 500-stock index rose 2.71, or 0.2 percent, to 1200.82. The Dow Jones industrial average gained 9.93, or 0.1 percent, to 10,522.56. The Nasdaq composite index climbed 5.96, or 0.3 percent, to 2068.96. The benchmarks advanced even as oil prices jumped more than $2 a barrel.

Investors will get government reports on retail sales and producer prices tomorrow. A report on consumer prices is expected Wednesday.


Morgan Stanley gained $1, to $50.88. The departure of Purcell, 61, ends a battle with former executives who said the merger of Morgan Stanley investment bank with Dean Witter's brokerage has resulted in four years of stock underperformance.

Sirius climbed 34 cents, or 6 percent, to $5.99, for its biggest advance this quarter. The company created a technology to increase network capacity by 25 percent to add channels and narrow the gap with larger competitor XM Satellite Radio Holdings.

McDonald's and Wendy's International retreated on concern a second possible case of mad cow disease in the United States might slow beef and hamburger sales. McDonald's fell 42 cents, or 1.4 percent, to $29.11, for the biggest loss in the Dow average. Wendy's dropped $1.12, or 2.3 percent, to $46.78, for the S&P 500's second-steepest decline.

Northwest Airlines declined 75 cents, or 11.9 percent, to $5.58, after Chairman Gary L. Wilson disclosed he sold 59 percent of his Northwest stock over the past month.


New York Stock Exchange composite index rose 12.73, to 7213.02.

American Stock Exchange index rose 6.47, to 1534.26.

Russell 2000 index of smaller-company stocks rose 2.69, to 629.02.


NYSE: 1.27 billion shares, up from 1.25 billion on Friday. Advancers outnumbered decliners 7 to 5.

Nasdaq: 1.46 billion shares, up from 1.44 billion. Advancers outnumbered decliners 8 to 7.


Crude oil for July delivery: $55.62, up $2.08.

Gold for current delivery: $429.30 a troy ounce, up from $427.40 on Friday.