NEW YORK - After an indecisive day, stocks turned around in the last minutes of trading Monday and managed to end with modest gains.
Last week, the market had its worst drop since mid-August, and for much of the day it looked as if the losses would continue. Near midday, the Standard & Poor's 500 index hit a two-month low. But oil prices recovered from last week's rout, and the broader market rose over the last hour of trading, finishing at its highest levels of the day.
The Dow Jones industrial average picked up 103.29 points, or 0.6 percent, to 17,368.50. The S&P 500 index gained 9.57 points, or 0.5 percent, to 2,021.94. Nine of the 10 sectors on the S&P 500 finished higher, though most of the gains were small. The Nasdaq composite index added 18.76 points, or 0.4 percent, to 4,952.23.
Early in the day, the price of oil fell below $35 a barrel for the first time since early 2009. However, oil recovered and rose about 2 percent, breaking a streak of six straight losses.
U.S. crude gained 69 cents at $36.31 a barrel in New York. Brent crude, a benchmark for international oils, fell a penny to $37.92 a barrel in London.
The gain sent oil companies broadly higher. ExxonMobil rose $1.69, or 2.3 percent, to $76.03 and Chevron added $2.89, or 3.3 percent, to $89.33. Natural gas prices plunged to the lowest level since September 2001 as warm weather continued to erode demand for home heating.
The Federal Reserve will start its last meeting of the year Tuesday, and on Wednesday it is expected to raise interest rates for the first time in almost a decade. The Fed's key short-term interest rate has been close to zero since Dec. 16, 2008.
The boost in rates would be a sign of confidence in the U.S. economy, but some investors worry that it will slow growth.
Phil Orlando, chief equity strategist for Federated Investors, said the Fed is reacting to positive signs like increased hiring and economic growth. While inflation is lower than the Fed would like, Orlando said, the Fed will not wait for inflation to rise further, because it will take a long time before the economy feels the full effect of higher interest rates.
"The Fed can't wait," he said. "It'll be 18 months before that change in policy hits the economy."
Orlando also said the boost in interest rates will set off a rally that will take stocks higher for the rest of the year, possibly back to the record levels they set in May.
Stocks have wobbled in recent weeks. It's been more than a month since the S&P 500 rose for two consecutive days.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.22 percent from 2.13 percent. The dollar rose to 120.87 yen from 120.77 yen Friday. The euro was unchanged at $1.0993.