Rising oil prices curb US stocks gains
NEW YORK—US stocks managed modest gains Wednesday, under pressure from soaring oil prices that stoked fears of a slowdown in the struggling US economic recovery.
The Dow Jones Industrial Average rose 8.78 points (0.07 percent) to finish at 12,066.80, while the broad-based S&P 500 index advanced 2.11 points (0.16 percent) to 1,308.44.
The tech-heavy Nasdaq was the best performer, adding 10.66 points (0.39 percent) at 2,748.07.
The blue-chip Dow, which had a 1.38 percent selloff Tuesday, spent much of the day drifting in and out of positive territory.
The wave of social unrest sweeping the Middle East and North Africa was expected to keep financial markets under pressure for some time, analysts said.
“The longer the unrest continues, the greater the risk for economic backlash across the globe, including the US, from rising oil prices,” said Frederic Dickson at DA Davidson & Son.
Traders grappled “with the impact of continued strength in oil prices, which eclipsed the $100 per barrel mark amid exacerbated tensions in the Middle East, on the economy,” Charles Schwab analysts said in a client note.
The benchmark New York futures contract closed above $102 a barrel as violent clashes in Libya between leader Moamer Kadhafi’s forces and the opposition stoked concerns about the country’s oil production.
Gold hit another record, crossing $1,440 an ounce, as investors turned to the safe-haven asset in the face of spreading political tensions in the Arab world.
Federal Reserve chairman Ben Bernanke wrapped up two days of semi-annual testimony to Congress on monetary policy, in which he said the recovery was strengthening but unemployment remained too high.
The Fed’s Beige Book report on the economy, to be used by the central bank policymakers at a meeting later this month, said that “overall economic activity continued to expand at a modest to moderate pace in January and early February.”
Private payrolls firm ADP reported a 15 percent increase in job creation from January – to 217,000 jobs – much better than the hiring slowdown expected by economists.
“Overall, this is a very strong report that indicates continued improvement in the labor market,” said Nicholas Tenev of Barclays Capital Research.
The ADP report was seen as boding well for Friday’s official February jobs data.
In the tech sector, Apple bounced 0.80 percent higher to $352.12 after presented its new version of the iPad, the iPad 2. Investors were relieved to see Apple boss Steve Jobs emerge from medical leave to unveil the new tablet.
Internet giant Yahoo! leaped 3.29 percent to $16.63 following news reports that it is in talks to sell its $7 billion stake in Yahoo! Japan to Softbank.
The bond market fell. The yield on the 10-year Treasury rose to 3.46 percent from 3.41 percent late Tuesday, while the yield on the 30-year Treasury increased to 4.55 percent from 4.49 percent.
Bond prices and yields move in opposite directions.
