Energy companies lead small stocks gain

U.S. stock indexes finished modestly higher Monday, extending the market’s solid gains from a rally last week.

Energy companies notched the biggest gains, after the price of U.S. crude oil closed higher than $59 a barrel for the first time since November. Smaller company stocks fared better than the rest of the market.

Stocks were riding the momentum from last week, when the S&P 500 resumed its torrid start to the year following a brief, five-day stumble. The index is back to within 3.5 percent of its record high, set in September, after clawing back all of its terrifying drop from December.

One key to the recent rally has been the belief that the Federal Reserve will slow its pace of increases for interest rates. The worry in December was that the central bank would raise rates too fast in the face of a slowing global economy and choke off growth. The Fed will meet to discuss interest-rate policy this week, with an announcement scheduled Wednesday, but economists expect no change to rates.

Perhaps more important is what the Fed says about its vast trove of bonds. The central bank bought trillions of dollars in bonds after the 2008 financial crisis to keep interest rates low and support markets, but it’s been slowly letting some roll off as they mature. Investors want to know how much the Fed will ultimately hold onto, and how long it will take to get there.

Monday’s upward swing in oil prices came after OPEC canceled a meeting that had been scheduled for next month. The move means that a production cut imposed by the oil cartel in January remains in place, at least until the cartel agrees to meet again.

Benchmark U.S. crude oil rose 1 percent to settle at $59.09 a barrel; Brent crude gained 0.6 percent to close at $67.54 a barrel.