Wall Street buoyed as price of crude declines

Dow Jones:12,077.09 (–28.69) S&P 500:1,307.10 (–0.30) Nasdaq:2,737.90 (+14.91)

MOST US stocks rose yesterday, as crude oil’s retreat from the highest level since 2008 eased concern that surging energy prices will hurt the global economic recovery.

“We’re certainly watching a battle between nerves and economic fundamentals,” said Bruce McCain, who oversees $25 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland.

“For the most part, economic data points in the US have been good. The focus will be on oil, rumours and their implications,” he said.

Crude in New York retreated from the highest level in 29 months on assurances from the US, Saudi Arabia and the International Energy Agency that they can compensate for any disruption of Libyan shipments.

Futures slipped after White House press secretary Jay Carney said the US will be able to respond to any curtailment resulting from Middle East turmoil. Oil prices at current levels are not a problem for the global economy, said Nariman Behravesh, the chief economist at IHS Global Insight. That will change if they rise “much higher”, he said.

The SP 500 rose 0.3 per cent earlier yesterday as Labor Department figures showed that applications for jobless benefits fell by 22,000 to 391,000 in the week ended February 19th.

Economists forecast claims would drop to 405,000, according to the median estimate in a Bloomberg News survey.

Boeing, the largest US maker of aircraft, rose 0.8 per cent to $70.76.

Priceline.com rose 8.5 per cent to $462.34. The online travel agency projected first-quarter earnings would be at least $2.34 a share, exceeding the $2.30 average forecast of analysts surveyed by Bloomberg.

General Motors tumbled 4.5 per cent to $32.02. The drop marked the first day GM traded at less than its $33 initial offering price in November. The drop in GM shares may be an over-reaction to events in Libya and rising oil prices, said David Whiston, an equity analyst with Morningstar in Chicago.

Exxon fell 1.3 per cent to $85.97. Schlumberger fell 3.5 per cent to $89.65. Newmont Mining, a US gold producer, fell 7.4 per cent to $54.76. – (Bloomberg)