Market ignores surging oil prices
Stocks capped a week of gains with yet another advance Friday as investors, setting aside a record high price for oil, focused instead on a surge in consumer confidence. The major indexes all closed the week higher.
Wall Street shrugged as crude oil futures hit an all-time high of $58.60 per barrel, before settling at $58.47, up $1.89, on the New York Mercantile Exchange. An increase in demand and worries about global refining capacity drew heightened speculation in the oil market.
But some analysts said rising oil prices weren’t cause for alarm on Wall Street, as higher energy costs haven’t made a dent in corporate profits.
“Companies can make money, and plenty of it, with oil at these levels,” said Scott Wren, senior equity strategist at A.G. Edwards & Sons. “We’ve had oil near these levels for nearly two quarters and companies have continued to knock the ball out of the park, beating consensus earnings estimates.”
The Dow Jones industrial average rose for the seventh straight session, gaining 44.42, or 0.42 percent, to 10,623.07.
Broader stock indicators also advanced. The Standard & Poor’s 500 index moved back into positive territory for the year for the first time since March 9, gaining 6.00, or 0.5 percent, to 1,216.96. The Nasdaq composite index gained 0.96, or 0.05 percent, to 2,090.11.
Bonds were nearly flat, with the yield on the 10-year Treasury note at 4.08 percent, up from 4.07 percent late Thursday. The U.S. dollar fell against other major currencies. Gold prices rose, heading for their fourth weekly gain.
Despite surging oil prices, the market consistently scratched out small gains this week as the Labor Department reported declines in both wholesale and retail prices, easing Wall Street’s fears of inflation. For the week, the Dow gained 1.05 percent, the S&P rose 1.57 percent, and the Nasdaq was up 1.31 percent.
It was a “quadruple witching day” on Wall Street, in which investors cash in quarterly options and futures contracts, written on equities and the major indexes, and buy new ones, which likely accounted for some of the rise in stock prices. Increased volatility and widely varying stock prices and high volumes often accompany such days.
By the close, 1.93 billion shares changed hands on the New York Stock Exchange, versus 1.36 billion on Thursday.
Advancing issues outnumbered decliners by more than 9 to 5 on the NYSE.
The Russell 2000 index of smaller companies was up 0.16, or 0.02 percent, at 644.19.
Overseas, Japan’s Nikkei stock average closed 0.86 percent higher. Britain’s FTSE 100 was up 0.65 percent, Germany’s DAX index was up 0.54 percent, and France’s CAC-40 was up 0.85 percent.