Stocks finished an uncertain session modestly higher Monday despite a sharp rise in crude oil prices and unease over the Federal Reserve’s upcoming meeting.
Crude futures rallied in afternoon trading, reversing last week’s trend and adding to worries about high energy prices as the summer driving season approaches. A barrel of light crude settled at $50.92, up $1.20, on the New York Mercantile Exchange.
The Fed’s Open Market Committee was expected to raise the nation’s benchmark rate by a quarter percentage point to 3 percent at its meeting today. Many investors waited to see what the central bank would have to say in its economic assessment statement about the recent slowdown in growth and the prospects for inflation.
“There’s a certain amount of caution which is preventing investors from putting more assets to work,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “Right now there are too many question marks about the economy that need to be answered before we can move forward.”
Yet while trading volume was lower than usual, the buying was broad based as some investors took a chance that the Fed’s statement might be too bullish.
The Dow Jones industrial average rose 59.19, or 0.58 percent, to 10,251.70.
Broader stock indicators also moved higher. The Standard & Poor’s 500 was up 5.31, or 0.46 percent, at 1,162.16, and the Nasdaq composite index gained 7.00, or 0.36 percent, to 1,928.65.
The bond market finished slightly higher after a volatile session, with the yield on the 10-year Treasury note falling to 4.19 percent from 4.20 percent late Friday. The dollar moved higher against most major currencies, while gold prices fell sharply.
Growth in manufacturing activity declined slightly more than expected in April, according to the Institute for Supply Management. The ISM’s manufacturing index came in at 53.3, compared to 55.2 in February. Economists had expected a reading of 55. Any reading above 50 represents growth in activity.
Advancing issues outnumbered decliners by about 8 to 5 on the New York Stock Exchange, where preliminary consolidated volume came to 2 billion shares, compared to 2.39 billion at the same point Friday.
The Russell 2000 index of smaller companies was up 6.48, or 1.12 percent, at 585.86.
Overseas, Japan’s Nikkei stock average fell 0.06 percent. In Europe, Germany’s DAX index gained 0.94 percent and France’s CAC-40 rose 0.69 percent. Markets in London were closed for a bank holiday.
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