Rising oil, commodity prices pull stocks higher

NEW YORK — Investors are riding higher energy prices into the close of a strong quarter.

NEW YORK — Investors are riding higher energy prices into the close of a strong quarter. Energy, industrial and material stocks pulled the market higher in light trading volume Monday as investors looked to put money into areas that would benefit from an improving economy. Crude oil rose $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange after Nigerian militants damaged and partly shut down an offshore oil platform belonging to Royal Dutch Shell. Stocks rose sharply after seesawing in the early going. Investors who ran the market up more than 30 percent in three months on a litany of "less bad" economic data, have become more cautious about the pace of the economy’s recovery in recent weeks, looking for more concrete signs of growth. With the quarter’s end on Tuesday, some money managers who were buying stocks bolster their returns. The Standard & Poor’s 500 index is up 15.2 percent since the start of the April-June quarter. "I think there might be a little bit of quarter-end of window dressing going on," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York. He also said that the jump in crude oil is helping to support the overall market. In late afternoon trading, the Dow Jones industrial average rose 84.34, or 1 percent, to 8,522.73. The S&P 500 index rose 7.82, or 0.9 percent, to 926.72, while the Nasdaq composite index rose 8.70, or 0.5 percent, to 1,846.92. There was little economic news Monday but the week, which is abbreviated by the Independence Day holiday on Friday, brings key data that will give investors a better sense of where the economy is headed. Doreen Mogavero, president of Mogavero, Lee & Co., said the market likely will trade in a tight range as investors await a clearer signal on the economy. "We want to see if things really are getting better," Mogavero said. Of particular importance is the government’s monthly employment report, due Thursday. Though considered a lagging indicator of the country’s economic health, the unemployment rate is still one of the most closely watched gauges of the economy. The labor market is intricately tied to many facets of the economy, including consumer spending. Investors will also get readings on consumer confidence and manufacturing this week. Though the Dow is still up 28.9 percent from a 12-year low on March 9, it has fallen 4.1 percent from a five-month high on June 12. Last week, the major indexes finished mixed. The Dow fell 1.2 percent; the S&P 500 index slipped 0.3 percent; and the Nasdaq rose 0.6 percent. Harry Rady, chief executive of Rady Asset Management, is concerned that although the market’s rally has lost steam in the past three weeks traders are still too optimistic about how quickly the economy can recover. "I see a bit of complacency creeping into the market," he said. "The market has run up, and that has the inverse effect of what it should." Rady is uneasy watching a gauge of fear in the stock market continue its retreat and contends that investors are overlooking trouble spots in the economy like heavy debt loads and weakness in the dollar. The Chicago Board Options Exchange Volatility Index, or VIX, is a measure of stock market volatility that has been easing since early March. The VIX is down 36 percent in 2009 and stands below 26. The historical average is 18-20. It hit a record 89.5 in October at the height of the financial crisis. Beyond the stock market, traders followed the sentencing of Bernard Madoff, who was given the maximum 150 years in prison for his multibillion-dollar fraud scheme. A U.S. District judge handed down the sentence in New York. Madoff pleaded guilty in March to securities fraud and other charges. Prosecutors had been seeking the 150-year jail sentence, while his lawyers had sought 12 years in prison. About two stocks rose for everyone that fell on the New York Stock Exchange, where volume came to a relatively low 681 million shares compared with 684.7 million shares traded at the same time Friday. Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.49 percent from 3.53 percent late Friday. The dollar was mixed against other major currencies. Gold prices fell. The gains in commodities lifted energy, industrial and materials stocks. Occidental Petroleum Corp. rose $2.12, or 3.3 percent, to $66.42, defense contractor General Dynamics Corp. rose $1.56, or 2.8 percent, to $57.02 and Eastman Chemical Co. rose $1.49, or 4 percent, to $38.90. In other trading, the Russell 2000 index of smaller companies fell 1.20, or 0.2 percent, to 512.02. Overseas, Britain’s FTSE 100 rose 1.3 percent, Germany’s DAX index advanced 2.3 percent and France’s CAC-40 rose 2 percent. Japan’s Nikkei stock average fell 1.0 percent. ______ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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