NEW YORK (AP) - Wall Street steadied itself yesterday after two sessions of steep declines, rebounding moderately as oil prices stepped back from their frenetic upward run.
Oil set another trading record overnight - moving above $135 per barrel for the first time - then pulled back below $131, offering some relief for stock investors. Meanwhile, the Labor Department said the number of workers seeking unemployment benefits declined by 9,000 last week to 365,000. The market had expected a slight increase.
But the economic fallout from ascendent energy prices remained Wall Street’s focus.
“People are concerned about the economy and what’s happening with oil,” said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, referring to the advance in stocks.
The modest rise in stocks followed a decline in the Dow Jones Industrial Average that totaled about 427 points, or 3.3 percent, over the course of Tuesday and Wednesday. It was the steepest two-day loss since late February. Stocks have declined in three of the past four sessions.
The Dow rose 24.43, or 0.19 percent, to 12,625.62.
Broader stock indicators also moved higher. The Standard & Poor’s 500 Index rose 3.64, or 0.26 percent, to 1,394.35, and the Nasdaq Composite Index rose 16.31, or 0.67 percent, to 2,464.58.
Even with the declines of more than 2 percent in the major indexes this week, stocks are still well off their mid-March lows. The Dow is 7.5 percent above its close of 11,740.15 on March 10, when investors were preoccupied with worries over the soundness of the credit markets. Since then, Wall Street has reshuffled its list of concerns, placing greater emphasis on the well-being of the overall economy, not just the troubled financial sector.
Bond prices fell sharply yesterday. The yield on the benchmark 10-year Treasury note rose to 3.92 percent from 3.81 percent late Wednesday.
Light, sweet crude fell $2.36 to settle at $130.81 a barrel on the New York Mercantile Exchange, pulling back from an earlier record of just above $135. That retreat helped the stock market find some stability after two days of drops.
“Hopefully it will last. But I think oil’s been scaring people,” said Todd Leone, managing director of equity trading at Cowen & Co. He pointed out that the airline industry is getting hit particularly hard, which “slows down the whole economy a bit.”
The spike in oil prices has also fanned investors’ uneasiness about consumer-level inflation. The big fear is that Americans worried about rising prices for everything from gasoline to food will be less willing to reach into their wallet for other items. A pullback could deal a major blow to the economy because consumer spending accounts for more than two-thirds of U.S. economic activity.
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