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OPEC news lifts stocks
NEW YORK » Blue chip stocks got a boost yesterday as OPEC signaled it would raise output to help curb surging oil prices, offering investors some relief from persistent worries about inflation. But the overall market was mixed while Wall Street awaited May employment numbers from the Labor Department and Intel Corp.'s mid-quarter forecast.
Trading was light and uneventful, with few investors making big moves ahead of data that could give them clues about the direction of the economy and corporate profits.
"Everyone seems pretty complacent about the market," said David Hegarty, head trader at Commerzbank Securities. "They're not seeing a dire need to do anything either way, to buy or to sell. It's not exciting ... and that's fine. I think the market is pretty fairly valued right now."
The Dow Jones industrial average closed up 60.32, or 0.6 percent, at 10,262.97.
The broader gauges were narrowly mixed. The Nasdaq composite index wilted 1.79, or 0.1 percent, to 1,988.98. The Standard & Poor's 500 index gained 3.79, or 0.3 percent, to finish at 1,124.99.
The price of the Treasury's 10-year note closed down 732 point, while its yield rose to 4.73 percent from 4.71 percent Tuesday. Two-year Treasury notes fell 116 point and yielded 2.57 percent, down from 2.60 percent Tuesday.
Stocks have wobbled lately amid soaring oil prices, which reached a 21-year high Tuesday after a weekend terrorist attack in Saudi Arabia. A possible remedy was in sight yesterday, however, when the president of the Organization of Petroleum Exporting Countries said members of the group must assess their ability to produce more in an effort to calm the markets.
Saudi Arabia, the world's leading crude exporter, has already boosted its production, and the United Arab Emirates announced yesterday it plans to pump more oil as well. Kuwait has also said it could raise output. Oil ministers from OPEC's 11 members were to discuss the matter today.
"The fact that more and more OPEC members are saying they're willing to join in and up production is certainly a positive for the market," said Peter Cardillo, chief strategist at S.W. Bach & Co. "I think the feeling is ... barring any unforeseen geopolitical problems, the price of oil is going to head lower."
While the prospect of lower fuel prices was good news for inflation-wary investors, buyers seemed to lack conviction yesterday, and volume remained light. Some market participants may be reluctant to make big commitments ahead of the government's May employment report, due tomorrow. Strong data in recent months has raised anxieties about rising interest rates, though many analysts say Wall Street has largely absorbed those worries.
A number of chip companies are preparing mid-quarter updates this week, including industry bellwether Intel, which will release its forecast today. Investors have been little impressed with the reports so far, however, and weakness in the semiconductor sector weighed on the tech-heavy Nasdaq.
Fairchild Semiconductor International Inc. sank $1.37, or 7 percent, to $18.13, after reiterating its previous forecast yesterday.
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