updated 4/5/2005 9:38:01 AM ET 2005-04-05T13:38:01

Stocks managed to squeeze out modest gains in a volatile session Monday, as crude oil futures, which briefly topped $58 per barrel in early trading, moved lower. A rare piece of good news for embattled Dow Jones industrial average component American International Group Inc. pushed the blue-chip index higher.

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Oil prices again kept investors on edge after reaching a new intra-day high of $58.28 in morning trading on the New York Mercantile Exchange. After fluctuating throughout the session, oil futures eventually settled at $57.01, down 26 cents.

Oil remained a source of concern for investors, who fear that crude prices in the high $50 range could eat into consumer spending, prompting either an economic slowdown or rising prices that could trigger inflation. And there was no real sign that oil would decline substantially.

“It’s hard to say where that line in the sand is, that level for oil prices where the market will seriously sell off,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “I do think that if you have sustained levels of $60 to $65, then the market will be very hard pressed to make any move to the upside.”

The Dow Jones industrial average was up 16.84 points, or 0.2 percent, at the close, while the broader Standard & Poor’s 500-stock index was up 3.20 points, or 0.3 percent. The Nasdaq composite index was higher by 6.26 points, or 0.3 percent.

AIG gained $2.35 to $53.30 after New York Attorney General Eliot Spitzer said a civil resolution with AIG would be achievable, and that the company was fully cooperating with his investigation of the company’s accounting and business practices.

The concerns about higher oil prices drew attention away from ChevronTexaco Corp.’s $16.4 billion acquisition of oil explorer Unocal Corp., the reported sale of Morgan Stanley’s Discover Card division and the possibility of a renewed bidding war for MCI Inc.

“No matter what else may be going on, when you have oil topping $58 per barrel, the market’s main focus is going to be inflation related,” said Peter Cardillo, chief strategist and senior vice president at S.W. Bach & Co. “I don’t see this market collapsing, but it’s going to be like this for a while until we see oil stabilize and we get clarity on interest rates.”

Not even ChevronTexaco’s move for Unocal, which valued the company at $62 per share, was enough to move the market. Unocal tumbled 7.4 percent, or $4.75, to $59.60, due to the relatively low valuation; ChevronTexaco lost 3.9 percent, or $2.33, to $56.98.

Morgan Stanley climbed $1.43 to $58.30, after a media report said the company’s board had approved the sale of its Discover Card credit division. Dow Jones Newswires, citing an unidentified source, reported the board had authorized the divestiture, which is expected to net between $8 billion and $9 billion. A Morgan Stanley spokeswoman called the report a “market rumor.”

MCI Inc. slumped 21 cents to $25.08 after it said it will reopen talks with Qwest Communications International Inc., despite having agreed to a $7.6 billion takeover bid by Verizon Communications Inc. Qwest, which sweetened its offer to nearly $9 billion, added 18 cents to $3.82, while Verizon was up 46 cents at $35.65.

General Motors Corp. lost 33 cents to $29.05 after the company said Chairman and CEO Rick Wagoner would take direct control over daily responsibility for the automaker’s struggling North America division.

Overseas, Japan’s Nikkei stock average fell 0.5 percent. In Europe, Britain’s FTSE 100 lost 0.4 percent, Germany’s DAX index dropped 0.7 percent and France’s CAC-40 fell 0.7 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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