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Economic report
boosts U.S. stocks
U.S. stocks rose, led by energy companies including Exxon Mobil Corp. as the price of crude oil surged to a record in the wake of terrorist attacks in Saudi Arabia, the world's largest oil exporter.
"Higher sustainable oil prices would be favorable for companies in the energy sector," said Brett Gallagher, who helps manage $9 billion as head of U.S. equities at Julius Baer Investment Management Inc. in New York. "Spending on oil services and equipment would have to increase."
Transportation stocks such as Delta Air Lines Inc., whose fuel costs rise with the increase in oil prices, slumped.
The Standard & Poor's 500 Index gained 0.52, or 0.1 percent, to 1121.20. The Dow Jones Industrial Average advanced 14.20, or 0.1 percent, to 10,202.65. The Nasdaq Composite Index added 4.03, or 0.2 percent, to 1990.77. The index climbed for a seventh day, its longest rally since Sept. 4.
About 15 stocks rose for every 14 that fell on the New York Stock Exchange. Some 1.2 billion shares changed hands on the Big Board, 17 percent less than this year's daily average and the fourth straight day of below-average trading.
The price of the Treasury's 10-year note closed down 1532 point, while its yield rose to 4.71 percent from 4.65 percent Friday. Two-year Treasury notes fell 332 point and yielded 2.58 percent, up from 2.54 percent Friday.
Benchmark indexes reached their highest levels of the day after a gauge of U.S. manufacturing unexpectedly increased in May. The Institute for Supply Management's factory index rose to 62.8, beating the 61.5 estimate from a Bloomberg News survey. A reading greater than 50 signals expansion. The index, which had a reading of 62.4 in April, has exceeded 60 for seven months.
The indexes turned lower on concerns about higher energy prices, falling as much as 0.7 percent, before erasing their losses in the final 30 minutes of trading.
"The stronger-than-expected economic data we saw earlier today have enabled the markets to shrug off the higher oil prices," said Todd Clark, head of listed trading at Wells Fargo Securities.
In New York, crude oil for July delivery jumped 6.1 percent to $42.33 a barrel on the first day of trading since attacks in Saudi Arabia killed 22 people on Saturday. It was the biggest single-session increase since March 24, 2003, when U.S. and U.K. forces were massed on Iraq's border.
"If something were to happen to Saudi Arabia, there is no one else that could step in and increase demand to make up for the lost supply," said Gallagher.
An index of energy stocks rose 1.3 percent, for the largest gain among the S&P 500's 10 industry groups.
Exxon, the biggest publicly traded oil company, advanced 45 cents to $43.70.
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