By Kate Gibson

U.S. stocks sputtered in mixed trade at Monday's start, with energy shares climbing along with the price of crude and the financial sector weighed as firms detailed their exposure to the alleged $50 billion fraud by Bernard Madoff.

The Dow Jones Industrial Average (DJI) gained 9.8 points to 8,639.48.

The S&P 500 (SPX) gained 1.04 points to 880.77, while the Nasdaq Composite (RIXF) shed 3.83 points to 1,536.89.

The economic calendar for Monday included the December Empire State Index, with the gauge of manufacturing activity in the New York region contracting at a record pace in November.

In a separate report, the Federal Reserve said output of the nation's factories, mines and utilities declined 0.6% in November on broad-based weakness across manufacturing industries. .

Investors will also be looking ahead to Tuesday's Federal Reserve interest-rate decision, where rates are expected to come down half a point to 0.5%. .

"The FOMC meeting should be overshadowed this week by earnings from Goldman Sachs (GS) on Tuesday and Morgan Stanley (MS) on Thursday," said Marc Pado, U.S. strategist at Cantor Fitzgerald.

Crude-oil futures rose before a meeting of the Organization of Petroleum Exporting Countries later in the week, where production is expected to be cut again. Light crude for January delivery climbed $2.29 to $48.57 a barrel in early trade on the New York Mercantile Exchange. .

The dollar fell sharply against other major currencies, with the dollar index (DXY) down 0.8% to 82.44. .

"The uncertainty surrounding the fate of the U.S. auto industry, coupled with the market's expectation of an imminent Fed rate cut on Tuesday, pressured the dollar to start the week in a distresses state," said Rebecca Lia, a currencies analyst with Wachovia Corp.

The Wall Street Journal reported Monday that the Bush administration is sizing up what terms to seek from the auto industry in return for a bailout, including whether to push the companies to file for bankruptcy.

The administration is discussing a rescue totaling $10 billion to $40 billion or more, the Journal reported.

Shares in General Motors Corp. (GM) and Ford Motor Co. (F) both rose in early trade.

As more details of the alleged fraud by former Nasdaq Chairman Bernard Madoff emerged, Banco Santander (STD) said its customers had an exposure of around $3.1 billion though its Optimal asset-management business, while Japan's Nomura (NMR) has an exposure of around $302 million.

Former Dow component Honeywell International Inc. (HON) shares 9.3% after the industrial company reaffirmed its full-year guidance. .

Late Sunday Huntsman Corp. (HUN) ended its agreement to be acquired by Hexion Specialty Chemicals Inc. and reached a settlement over litigation. Huntsman said it is due payments totaling $1 billion.

In international markets, Japan's Nikkei 225 rose 5.3% and the French CAC 40 index added 0.3%.

Stocks on Friday erased early losses to close higher after the Bush administration said it would step in to prevent a failure of U.S. automakers amid fears that more job losses would deepen the recession. The Dow Jones Industrial Average finished up 64.59 points, the S&P 500 climbed 6.14 points and the Nasdaq Composite added 32.84 points.

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