Stocks edge higher as oil, gas drop
NEW YORK – Falling energy prices gave stocks a modest lift Friday as Wall Street set aside worries about interest rates and a weak forecast from Intel Corp. But the gains weren’t enough to help the major indexes, which ended the week with losses.
Stocks zigzagged through most of Friday’s session, capping off a week of jittery trading as investors scoured for any news that might revive a year-end rally after a two-week break. Many are wishing for a solid holiday shopping season, with cheaper gasoline prices contributing to improving consumer confidence.
The University of Michigan reinforced those hopes when it said its consumer sentiment index for December added 7.1 points to 88.7, topping economists’ estimates for a reading of 85.
John Waterman, chief investment officer for Rittenhouse Asset Management, noted the upbeat Michigan number but said the market seems to be fixated on energy prices and next week’s Federal Reserve meeting. Now that the economy appears to be back on track, analysts worry that the Fed might keep raising interest rates and trigger a slowdown.
But Waterman expects Wall Street’s idleness to persist. “I think we’re going to head into a quieter period where unless there’s some big news, volume could slow and the market will move sideways,” he said.
At the close of trading, the Dow Jones industrial average gained 23.46, or 0.22 percent, to 10,778.58.
Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 3.53, or 0.28 percent, at 1,259.37, and the Nasdaq composite index added 10.27, or 0.46 percent, to 2,256.73.
Bond prices fell, with the yield on the 10-year Treasury note climbing to 4.53 percent from 4.46 percent late Thursday. The dollar was lower against other major currencies in European trading, while gold prices lingered near recent highs.
Oil and gas prices retreated after a week of sharp gains as a snowstorm blew through the Northeast and Midwest. On the New York Mercantile Exchange, natural gas plunged 68.2 cents to $14.312 per 1,000 cubic feet, and a barrel of light crude lost $1.27 to $59.39.
The major indexes finished lower this week despite the afternoon advance. For the week, the Dow dropped 0.91 percent, the S&P 500 fell 0.45 percent and the Nasdaq was down 0.73 percent.
While it’s been two weeks since the S&P 500 and the Nasdaq reached their highest levels since mid-2001, some traders are still confident the market will see one last run-up before the end of the year.
For that to happen, Wall Street needs to remain optimistic, according to Jay Suskind, head trader at Ryan, Beck & Co. Recent reports show the economy weathered record energy prices – the gross domestic product index rose 4.3 percent last quarter – but investors now fear the better-than-expected growth could bring more rate hikes from the Fed.
“All things being equal, if the economy continues to show strength and we don’t get any major surprises geopolitically or in the oil market,” Suskind said, “I think we do have the underpinnings of taking this market higher.”