Stocks advance as rising dollar sends oil lower
Stocks advanced Monday as investors showed their relief over falling oil prices and waited for the arrival of second-quarter corporate earnings this week.
There’s little economic news expected, so the drop in oil prices appears to be drawing some investors back into the stock market after weeks of losses. Oil fell at times fell by more than $5 a barrel as the dollar gained strength and as some market worries over the political tension in the Middle East appeared to dissipate.
Wall Street is fearful that consumers faced with soaring energy prices will trim spending in other areas. With consumer spending accounting for more than two-thirds of U.S. economic activity, a pullback could create sizable ripples so any retreat in oil is welcome.
While a quick rebound in oil is always possible, the retreat was nonetheless a welcome development for investors, according to Frank Ingarra, assistant portfolio manager at Hennessy Funds.
“It’s one day,” he cautioned, adding that investors are mindful that oil likely won’t continue to advance without some big pullbacks and that many investors would likely need to see a steeper decline to believe that the price of oil is breaking after rising about 50 percent this year. “I think you really need to have a big, big shock for it to mean that it’s going in the right direction.”
Wall Street is particularly eager for insights into how corporations are faring with the rise in energy costs and consumers potentially hesitant to spend. Aluminum producer Alcoa Inc. is set to start earnings season when it reports results Tuesday.
In late morning trading, the Dow Jones industrial average rose 71.24, or 0.63 percent, to 11,359.78.
Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 4.68, or 0.37 percent, to 1,267.58, and the Nasdaq composite index rose 14.25, or 0.63 percent, to 2,259.63.
Light, sweet crude fell $3.89 to $141.40 on the New York Mercantile Exchange.
Investors haven’t been optimistic lately about the prospects for an economic recovery in the second half of 2008 as they once had. The Dow has fallen the last three weeks while the Standard & Poor’s 500 index and the Nasdaq composite index have logged five straight weeks of declines. With drops of more than 20 percent from their October highs, the Dow and the S&P 500 entered bear market territory last week as rising oil stirred inflation concerns.
Bond prices showed little change. The yield on the benchmark 10-year Treasury note, which moves opposite its price, stood at 3.98 percent, flat with late Thursday.
The dollar mostly rose against other major currencies, while gold prices fell.
In corporate news, NBC Universal and two partners said Sunday they struck a deal to acquire The Weather Channel from Landmark Communications Inc. NBC is a unit of General Electric Co., which is scheduled to report its quarterly results Friday. GE rose 45 cents to $27.38.
General Motors Corp. is considering cutting more white-collar jobs and getting rid of some brands, according to a person familiar the company’s discussions. The person asked not to be identified because no decisions have been made. GM rose 28 cents, or 2.8 percent, to $10.40.
Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange, where volume came to 348.5 million shares.
The Russell 2000 index of smaller companies fell 0.36, or 0.05 percent, to 665.42.
Overseas, Japan’s Nikkei stock average rose 0.92 percent. In afternoon trading, Britain’s FTSE 100 rose 1.33 percent, Germany’s DAX index rose 2.08 percent and France’s CAC-40 advanced 1.72 percent.
from : http://www.miamiherald.com/business/AP/story/596063.html
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