U.S. stock gains limited by crude’s rise
EW YORK (MarketWatch) — U.S. stocks rose Wednesday, but the gains were limited as increased violence in Libya helped push oil above $102 a barrel, curbing enthusiasm over jobs data and an upgrade of chip manufacturers
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“Crude is moving higher in anticipation of potential disruptions in the export of oil to Europe and even the U.S.,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
“Crude may have a modest direct impact on the economy, but may very well have a more significant residual impact, especially if prices stay high for any prolonged period,” Pado added.
The U.S. government on Wednesday reported demand for petroleum climbed from last year, with both oil and gasoline supplies falling unexpectedly last week.
And, worries that unrest in the Middle East and North Africa would disrupt supply pushed the price of oil higher, with futures traded on the New York Mercantile Exchange lately up $1.92 at $101.55 a barrel, after rising to an intraday high of $102.37. Read more on oil prices.
Gyrating between gains and losses, the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 12,096, +37.61, +0.31%) was lately up 25.62 points to 12,083.64, with 16 of its 30 components on the rise, led by 3M Co. /quotes/comstock/13*!mmm/quotes/nls/mmm (MMM 91.59, +1.13, +1.25%)
The Standard & Poor’s 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,312, +5.17, +0.40%) gained 2.78 points to 1,309.11, with technology leading the gains among its 10 industry groups. Financials fell the most.
The Nasdaq Composite Index /quotes/comstock/10y!i:comp (COMP 2,756, +18.45, +0.67%) was up 13.06 points at 2,750.47.
Texas Instruments Inc. /quotes/comstock/13*!txn/quotes/nls/txn (TXN 36.35, +1.35, +3.84%) rose 3.3% after JPMorgan Chase & Co. hiked its ratings on the semiconductor sector, citing signs of increased demand. Read more on rally in chip stocks.
Advancers outpaced decliners by a roughly 3-to-2 ratio on the New York Stock Exchange, where volume neared 488 million shares as of 1 p.m. Eastern.
Ahead of Wednesday’s opening bell, a private report illustrating the addition of 217,000 positions to corporate payrolls in February coincided with a rise in crude-oil futures.
“Oil back above $100 tempers any initial enthusiasm after the ADP release,” said Peter Boockvar, equity strategist at Miller Tabak. Read more on jobs growth and ADP.
U.S. equities were hit Tuesday by crude’s rise, with the Dow industrials falling 168.32 points, or 1.4%, to 12,0538.02, its largest drop in a week.
“Seeing gasoline prices at the pump, especially on supreme, hit $4.00 per gallon will have a psychological impact on consumer spending,” said Pado at Cantor Fitzgerald.
The escalating energy prices came amid reports of new fighting for control of a major oil center in Libya, where anti-regime demonstrations have broken out in the wake of the overthrow of leaders in neighboring Tunisia and Egypt and have escalated into violence between protesters and forces loyal to Col. Moammar Gadhafi, who has been in power for 42 years.
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Showdown over Libyan oil fields
Gadhafi forces and rebels are fighting for control of Libya’s fields.“Crude may have a modest direct impact on the economy, but may very well have a more significant residual impact, especially if prices stay high for any prolonged period,” Pado added.
The U.S. government on Wednesday reported demand for petroleum climbed from last year, with both oil and gasoline supplies falling unexpectedly last week.
And, worries that unrest in the Middle East and North Africa would disrupt supply pushed the price of oil higher, with futures traded on the New York Mercantile Exchange lately up $1.92 at $101.55 a barrel, after rising to an intraday high of $102.37. Read more on oil prices.
Gyrating between gains and losses, the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 12,096, +37.61, +0.31%) was lately up 25.62 points to 12,083.64, with 16 of its 30 components on the rise, led by 3M Co. /quotes/comstock/13*!mmm/quotes/nls/mmm (MMM 91.59, +1.13, +1.25%)
The Standard & Poor’s 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,312, +5.17, +0.40%) gained 2.78 points to 1,309.11, with technology leading the gains among its 10 industry groups. Financials fell the most.
The Nasdaq Composite Index /quotes/comstock/10y!i:comp (COMP 2,756, +18.45, +0.67%) was up 13.06 points at 2,750.47.
Texas Instruments Inc. /quotes/comstock/13*!txn/quotes/nls/txn (TXN 36.35, +1.35, +3.84%) rose 3.3% after JPMorgan Chase & Co. hiked its ratings on the semiconductor sector, citing signs of increased demand. Read more on rally in chip stocks.
Advancers outpaced decliners by a roughly 3-to-2 ratio on the New York Stock Exchange, where volume neared 488 million shares as of 1 p.m. Eastern.
Crude concerns
On Capitol Hill, Federal Reserve Chairman Ben Bernanke was testifying for a second day, addressing the House Financial Services Committee a day after appearing before the Senate Banking Committee on Tuesday.Ahead of Wednesday’s opening bell, a private report illustrating the addition of 217,000 positions to corporate payrolls in February coincided with a rise in crude-oil futures.
“Oil back above $100 tempers any initial enthusiasm after the ADP release,” said Peter Boockvar, equity strategist at Miller Tabak. Read more on jobs growth and ADP.
U.S. equities were hit Tuesday by crude’s rise, with the Dow industrials falling 168.32 points, or 1.4%, to 12,0538.02, its largest drop in a week.
“Seeing gasoline prices at the pump, especially on supreme, hit $4.00 per gallon will have a psychological impact on consumer spending,” said Pado at Cantor Fitzgerald.
The escalating energy prices came amid reports of new fighting for control of a major oil center in Libya, where anti-regime demonstrations have broken out in the wake of the overthrow of leaders in neighboring Tunisia and Egypt and have escalated into violence between protesters and forces loyal to Col. Moammar Gadhafi, who has been in power for 42 years.
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