Investors look past higher oil prices
Stocks resumed their advance Thursday following a one-day hiatus as investors looked past higher oil prices and a somewhat cloudy picture for retail sales. The Dow Jones industrial average has shown gains in nine of the last 10 sessions.
Retailers’ reports on sales at stores open at least a year, an important measure known as same-stores sales, initially concerned some investors Thursday because of scattered warnings that sales would be light during April. Investors seemed to shake off those concerns and await further word from a flood of earnings reports that will start next week.
“I think investors are trying to figure out what the next Fed move is. We’re really at the point of chicken — where the Fed is trying to ward off inflation without submarining the economy,” said Mark Coffelt, portfolio manager at Empiric Funds, referring to when the Federal Reserve might adjust short-term interest rates.
After a back-and-forth morning, the Dow Jones industrial average rose 68.34, or 0.55 percent, to 12,552.96.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 8.93, or 0.62 percent, to 1,447.80, and the Nasdaq composite index picked up 21.01, or 0.85 percent, to close at 2,480.32.
Bonds showed little movement as stocks rose. The yield on the benchmark 10-year Treasury note was unchanged at 4.74 percent from late Wednesday after being lower earlier in the session. The dollar was mixed against other major currencies, while gold prices fell.
Higher oil prices have weighed on stocks in recent sessions. On Wednesday, weekly government figures showed a larger-than-expected decline in gasoline stockpiles. Light, sweet crude settled up $1.84 at $63.85 per barrel on the New York Mercantile Exchange.
The climb in stocks Thursday follows a pullback Wednesday that began after minutes from the Federal Reserve’s last meeting showed the central bank remains concerned enough about inflation that it won’t rule out an increase in interest rates. The nearly 90-point drop in the Dow industrials Wednesday was perhaps bringing out ebullient bargain hunters Thursday.
“I think what we’re seeing today is what we’ve been seeing the last nine days or so,” said Richard Hoyt, market strategist at KDV Wealth Management. The decline in stocks Wednesday snapped an eight-session winning streak for the Dow industrials — the longest string of gains for the blue chip average since 2003. Hoyt contends the recent run-up in stocks follows general investor enthusiasm over upward revisions to figures on gross domestic product, the broadest measure of the economy.
“You’ve got consumption which is 70 percent of GDP and is fairly strong due to an improving job market. Aggregate demand in general is fairly strong.
“We have to be careful not to read too much into incremental changes,” he said, referring in part to the weekly jobs figures released Thursday.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.49 billion shares.
The Russell 2000 index of smaller companies rose 6.81, or 0.84 percent, to 815.05.
Overseas, Japan’s Nikkei stock average closed down 0.73 percent. Britain’s FTSE 100 edged up 0.05 percent, Germany’s DAX index closed down 0.14 percent, and France’s CAC-40 finished down 0.05 percent.