U.S. Stocks Pull Solidly Higher As Oil Retreats From Highs
NEW YORK (MarketWatch) -- U.S. stocks on Monday stepped firmly higher, with investors heartened by gains in the dollar and as oil retreated from record highs, helping offset a profit warning from FedEx Corp.
"The unrelenting rise in the price of oil is impacting company statements and how investors are looking at stocks. FedEx was the latest in a long line of casualty stocks reporting that they can no longer absorb the rising cost of fuel without it affecting the bottom line," said Marc Pado, U.S. market strategist, Cantor Fitzgerald.
The Dow Jones Industrial Average gained 74.01 points to 12,819.89, with 24 of its 30 components posting gains.
The blue-chip gains were broad based, with Wal-Mart Stores Inc. and Caterpillar Inc. among those up more than 1%.
The S&P 500 rose 5.63 points to 1,394.91, with financials paving sector gains, up 1%.
MBIA Inc. was among financial stocks on the rise, recently up 8.3%, after the bond insurer said it would invest $900 million into its insurance unit and reported first-quarter losses that proved less than what some anticipated.
S&P sector decliners included energy, down 0.5%, and telecommunication services, recently off 0.4%.
The technology-heavy Nasdaq Composite added 17.14 points to 2,462.66.
On the New York Mercantile Exchange, oil futures slipped, retreating from last week's record-breaking 8% jump, with the contract for June delivery lately down 14 cents to stand at $125.82 a barrel. .
Gold futures also slipped, with the contract for June delivery off 50 cents to stand at $885.3 an ounce. .
The dollar rose against most other currency rivals amid talk of "verbal intervention" by U.S. officials seeking to boost the greenback, with The Wall Street Journal reporting an attempt by the Bush administration to put a floor under the dollar. .
Volume on the New York Stock Exchange topped 1 billion, with advancing stocks outpacing those on the decline nearly 2 to 1. On the Nasdaq, 570 million shares exchanged hands, and advancers topped decliners about 8 to 5.
Oil slick
U.S. stocks dropped sharply on Friday, after hefty losses from American International Group Inc. and another record high for oil prices.
On Monday, AIG was among the stocks weighing on the Dow, recently off 1.1%.
"The market looks tired of rallying on bad news. After reaching up toward technical resistance, the averages began their pullback phase. While the momentum indicators are nearing neutral, it looks like we need oil to get off of our backs to focus on anything else," said Pado.
On the economic front, Chicago Federal Reserve Bank President Charles Evans said in a speech early Monday that the outlook remains uncertain because of instability in the credit markets and housing sector. .
Active Issues
With oil prices creating a significant headwind, FedEx late Friday warned fourth-quarter profit would be hurt on fuel costs and weak volume.
FedEx shares edged 0.1% in recent action.
Shares of Research In Motion Ltd. gained 4.8% as the mobile communications company introduced the BlackBerry Bold and announced a $150 million research fund with Royal Bank of Canada and Thomson Reuters PLC.
Banking giant HSBC Holdings saw its shares rise 3% after reporting a higher first-quarter profit, as emerging-markets growth offset $3.2 billion in U.S. loan impairments and $2.6 billion in global markets write-downs. The lender also sounded worries over inflation.
Sprint Nextel Corp. also reported red ink, with the carrier losing $505 million.
Cablevision Systems Corp. reached an agreement to buy 97% of the Long Island newspaper Newsday for $632 million plus $18 million in prepaid rent.
Shares of Cablevision Systems fell 2.6%.
Overseas, Asian markets ended mostly higher, reversing course after dropping earlier on. .
In Europe, stocks were firm as inestors bought into stocks positively geared to higher oil prices. .
By Kate Gibson