Business

Stocks move higher as oil busts another record

NEW YORK – Wall Street reversed early losses to close higher Tuesday, as investors monitored the movements of record high oil prices but still laid bets that the economy and companies are in recovery mode.

Crude oil climbed to a record near $123 a barrel on the New York Mercantile Exchange as traders, who have nearly doubled the price of oil over the past year, reacted to the weakening U.S. dollar, supply threats, and a note from Goldman Sachs & Co. predicting that oil could reach $200 a barrel. High oil prices threaten to crimp consumers’ discretionary spending.

But oil price sticker-shock waned as investors looked past wider-than-expected quarterly losses at Swiss bank UBS, government-sponsored mortgage company Fannie Mae, and homebuilder D.R. Horton Inc.

“I think overall, the strength in stocks right now is on fairly firm footing,” said JPMorgan equities analyst Thomas J. Lee. “In some ways, first-quarter earnings are yesterday’s news.”

In recent weeks, stronger-than-expected results from companies outside the battered financial and housing sectors helped the stock market rebound to levels not seen since early January. Economic data has been better than expected – particularly Friday’s employment report and Monday’s data on the service sector – and meanwhile, the credit markets keep showing increased appetite for the risk that investors had avoided for months.

The Dow Jones industrial average rose 51.29, or 0.40 percent, to 13,020.83.

Broader stock indicators also rebounded. The Standard & Poor’s 500 index rose 10.77, or 0.77 percent, to 1,418.26, and the Nasdaq composite index rose 19.19, or 0.78 percent, to 2,483.31.

Bond prices pared earlier gains. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was at 3.92 percent late Tuesday, down from 3.87 percent on Monday.

Oil settled up $1.87 at $121.84. Gold climbed, while the dollar fell against most other major global currencies.

Overseas, Japan’s stock market was closed for a holiday. In Europe, Britain’s FTSE index finished flat, Germany’s DAX index fell 0.50 percent, and France’s CAC-40 fell 0.44 percent.



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