Wall Street reversed early losses to close higher Tuesday as investors monitored the movements of record high oil prices but still laid...
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.
The Dow Jones industrial average rose 51.29 to 13,020.83.
Microsoft, one of the 30 Dow stocks, added 62 cents to close at $29.70. Boeing, another Dow stock, gained 23 cents to end the day at $86.15.
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The Standard & Poor’s 500 index rose 10.77 to 1,418.26. The Nasdaq composite index rose 19.19 to 2,483.31.
High oil prices threaten to crimp consumers’ discretionary spending.
But oil-price sticker-shock waned and 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.”
Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research, said it is a good sign that stock traders started buying back in again when the S&P 500 briefly dipped below the technically significant 1,400 mark.
“We had some negative news this morning, and we’ve shaken it off. It’s encouraging,” Detrick said.
Huge quarterly losses from three major players in the financial and homebuilding industries initially sparked some stock selling Tuesday, but those dips were soon met by bargain-hunters betting that those sectors are a good buy right now given their low prices.