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Stock indexes close with modest gains

American flags fly at the New York Stock

American flags fly at the New York Stock Exchange on Wall Street on July 6, 2015. Credit: AP / Mark Lennihan

Stocks are closed with modest gains Monday, as investors tried to look beyond the uncertain timing of a possible interest rate increase by the Federal Reserve.

At the close on Wall Street, the Dow Jones industrial average had risen 125.6 points, about 0.8 percent, to 16,510.2. The Standard & Poor's 500 added nearly 9 points, about 0.5 percent, to nearly 1,967, and the Nasdaq composite, which dipped midday, climbed 1.7 points, about 0.04 percent, to nearly 4,829.

CRUDE ENERGY: As the markets opened the price of crude oil continued its climb. The price of U.S. benchmark crude oil was up $1.55 at $46.57 a barrel on the New York Mercantile Exchange.

FINANCIAL BOUNCEBACK: Stocks of major banks rose after sharp falls on Friday. Those declines were caused by fears that the Fed's decision to keep interest rates at historic lows would make it difficult for banks to charge their customers more to borrowers. Citigroup rose 41 cents, or 0.8 percent, to $50.71.

VW SKIDS: U.S.-traded shares of Volkswagen stumbled Monday following allegations that the German carmaker rigged U.S. emissions tests for about 500,000 diesel cars. The Environmental Protection Agency in the U.S. said the company had skirted clean air rules and could faces fines of more than $18 billion.

ANALYST'S OPINION: "Markets just needed to take a breather before going right back to fundamentals again," said analyst Yogi Dewan, founder of Hassium Asset Management in Gerrards Cross, U.K. "Earnings and attractive valuations will support a rebound from here. The Fed doesn't want to make a policy mistake by hiking too early, but it also doesn't want to lose credibility. It's difficult."

After the Federal Reserve left rates unchanged this past week, the S&P 500 erased its weekly gain, with financial companies tumbling. The late-week slump gave the equity gauge another period of indecision, as it capped its 10th straight week of back-and- forth results with a decline of 0.2 percent.

Reports from The Associated Press and Bloomberg News were used in this story.

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