Stocks were higher in afternoon trading Monday as news of an energy deal and a lifeline for Dubai helped buoy the market.
Financials wobbled as President Obama summoned bank chiefs to Washington but recovered slightly after the meeting was over.
President Obama told the bank chiefs they owe it to their country to help dig out of the financial crisis — by lending more money and supporting financial reforms.
U.S. Bancorp CEO Richard Davis, who attended the meeting, said, contrary to what lobbyists were saying, "We do support regulatory reform."
In an interview with CBS's "60 Minutes" on Sunday, Obama had condemned banker bonuses, saying: "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street."
"He didn't call us any names," Davis quipped after the meeting, referring to that fat-cat comment.
Citigroup is reportely close to a deal to repay over $10 billion of its loan from the government, which includes a plan to immediately issue $17 billion in new stock. Investors were encouraged by the move to get out from under the government's thumb but punished the stock amid concerns about dilution.
Bank of America is a step closer to hiring a CEO but compensation remains a sticking point, the Wall Street Journal reported.
Meanwhile, Morgan Stanley said on Sunday that it has hired former Merrill Lynch operating chief Gregory Fleming to run its investment management unit.
Shares of Charles Schwab
ExxonMobil gave a boost to the energy sector with its plans to buy natural-gas developer XTO Energy in an all-stock deal valued at $31 billion, but Exxon stock was the biggest drag on the Dow.
XTO shares jumped 15 percent and the SPDR Energy ETF was up more than 1 percent.
Weekend news that Abu Dhabi would provide $10 billion of surprise aidto debt-burdened neighbor Dubai helped assuage fears about the global fallout from Dubai's woes.
The dollar fell against the euro and yenafter the Abu Dhabi news. Oil fell below $70 a barreland gold was trading above $1,120 an ounce.
Last week, the dollar seemed to break its inverse pattern with stocks — both moved higher. But Kevin Cook of Peak6 Investment said stocks have actually been in a holding pattern for the past five weeks and he thinks the dollar still has further to go.
"On the news we got last night about the Dubai debt situation, we saw dollar profit-taking ... but [other currencies] could not sustain the rally," Cook said. "[T]hat shows you that this long-dollar trade is still on."
Cook expects the euro will fall to $1.45 in the next couple of weeks.
Sun Microsystems shot up more than 10 percent after encouraging talks between Oracle and European regulators that could clear the path for Oracle's acquistion of Sun.
Google announced plans to sell its own mobile phone direct to consumers as soon as next year, bypassing wireless operators in a rare strategic move, the Wall Street Journal cited sources as saying on Saturday.