to 8,529 …
Rising oil, commodity prices pull stocks higher
NEW YORK (AP) — A jump in oil sent investors rushing to
put money into the stock market in the final days of the second
Energy, industrial and materials stocks pulled the market
higher in light trading Monday as investors raced to keep up with
the gains in oil.
Crude rose $2.33 to settle at $71.49 a barrel on the New
York Mercantile Exchange after China said it would boost oil
reserves and Nigerian militants partly shut down an offshore oil
With the quarter’s end coming up on Tuesday some money
managers were buying stocks bolster their returns. The Standard
& Poor’s 500 index is up 16.2 percent since the start of the
Robert Pavlik, chief market strategist at Banyan Partners
LLC in New York, said some of the day’s gains reflected
“window-dressing” of portfolios and that the gains in energy helped
lift the overall market.
With some of the gains attributable to end-of-the-quarter
technical maneuvering by portfolio managers, analysts cautioned
against seeing the upswing as a sign of conviction among investors
that it was time to move into the market ahead of an economic
bounce. Stocks seesawed in the early going but jumped after oil
After running the market up more than 30 percent since
March on a litany of “less bad” economic data, investors have
become more cautious about the pace of the economy’s recovery in
recent weeks and are looking for more concrete signs of
The Dow Jones industrial average rose 90.99, or 1.1
percent, to 8,529.38. The S&P 500 index rose 8.33, or 0.9
percent, to 927.23, while the Nasdaq composite index rose 5.84, or
0.3 percent, to 1,844.06. Stocks ended last week mixed.
There was little economic news Monday but the week, which
is abbreviated by the Independence Day holiday on Friday, brings
key data that will give investors a better sense of where the
economy is headed.
Doreen Mogavero, president of Mogavero, Lee & Co.,
said the market likely will trade in a tight range as investors
await a clearer signal on the economy.
“We want to see if things really are getting better,”
Of particular importance is the government’s monthly
employment report, due Thursday. Though considered a lagging
indicator of the country’s economic health, the unemployment rate
is still one of the most closely watched gauges of the economy. The
labor market is intricately tied to many facets of the economy,
including consumer spending.
Investors also will get readings on consumer confidence
and manufacturing this week.
The Dow is up 30.3 percent from a 12-year low on March 9,
though it has fallen 3.1 percent from a five-month high on June 12.
The blue chips are now down only 2.8 percent in 2009.
Harry Rady, chief executive of Rady Asset Management, is
concerned that although the market’s rally has lost steam in the
past three weeks traders are still too optimistic about how quickly
the economy can recover.
“I see a bit of complacency creeping into the market,” he
said. “The market has run up and that has the inverse effect of
what it should.”
Rady is uneasy watching a gauge of fear in the stock
market continue its retreat, and contends that investors are
overlooking trouble spots in the economy like heavy debt loads and
weakness in the dollar. The Chicago Board Options Exchange
Volatility Index, or VIX, is a measure of stock market volatility
that has been easing since early March. The VIX is down 36 percent
in 2009 and stands below 26. The historical average is 18-20. It
hit a record 89.5 in October at the height of the financial
Beyond the stock market, traders followed the sentencing
of Bernard Madoff, who was given the maximum 150 years in prison
for his multibillion-dollar fraud scheme. A U.S. District judge
handed down the sentence in New York.
Madoff pleaded guilty in March to securities fraud and
other charges. Prosecutors had been seeking the 150-year jail
sentence, while his lawyers had sought 12 years in
About three stocks rose for every two that fell on the New
York Stock Exchange, where volume came to a light 1.1 billion
shares compared with 2.3 billion traded Friday. Volume was heavy
Friday because of the annual reconstitution of the Russell 3000
index. That forced investors to buy and sell hundreds of
Bond prices rose, pushing yields lower. The yield on the
benchmark 10-year Treasury note fell to 3.48 percent from 3.53
percent late Friday.
The dollar was mixed against other major currencies. Gold
The gains in commodities lifted energy, industrial and
materials stocks. Exxon Mobil Corp. rose $1.53, or 2.2 percent, to
$70.58, defense contractor General Dynamics Corp. rose $1.54, or
2.8 percent, to $57 and Eastman Chemical Co. rose $1.38, or 3.7
percent, to $38.79.
In other trading, the Russell 2000 index of smaller
companies fell 2.61, or 0.5 percent, to 510.61.
Overseas, Britain’s FTSE 100 rose 1.3 percent, Germany’s
DAX index advanced 2.3 percent, and France’s CAC-40 rose 2 percent.
Japan’s Nikkei stock average fell 1 percent.