Wall Street closed a quiet session with a moderate advance Thursday, with energy and other commodities companies leading the market as oil prices extended their record-breaking run.
The price of crude oil swept past $124 a barrel in late New York Mercantile Exchange trading, while gasoline rose to a new record of its own at the pump, climbing to a national average of nearly $3.65 a gallon.
Although the rising price of oil ignited concerns about inflation on Wednesday, knocking the Dow Jones industrial average down more than 200 points, stocks managed to hold on to their gains even as oil rose Thursday. Some of the big gainers were the companies that would benefit the most from higher commodities prices — the oil companies and metals producers like Alcoa Inc. — and they helped lift the major indexes.
Stocks also rose after retailers issued April sales results that, while not strong overall, were less gloomy than expected. The data suggested that high energy costs are leading consumers to alter their spending, and Wal-Mart Stores Inc. was one of the beneficiaries of that trend. But some apparel stores — whose merchandise falls into the category of discretionary items — again saw depressed sales as consumers budgeted more for gasoline and food.
Financial stocks were the worst performers of the day. Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis, said investors likely are still jittery over the sector, with continued concern about whether the companies have problems on their books beyond subprime mortgages. “Our guess is that the worst is not over for the financials on a fundamentals basis,” he said.
According to preliminary calculations, the Dow rose 52.43, or 0.41 percent, to 12,866.78.
Broader stock indicators turned higher after fluctuating at times during the session. The Standard & Poor’s 500 index rose 5.11, or 0.37 percent, to 1,397.68, and the Nasdaq composite index rose 12.75, or 0.52 percent, to 2,451.24.
Bond prices rose as some investors sought the safety of government debt despite the gains in stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.79 percent from 3.85 percent late Wednesday.
Gold prices rose, while the dollar declined against most other major global currencies.
Mixed economic readings and lofty energy prices could keep the market in a holding pattern through the summer, said Janna Sampson, director of portfolio management at Oakbrook Investments. “With oil high and continuing to go up, it’s going to be tough to get the market to have a sustainable rally.”
Alfred E. Goldman, chief market strategist at Wachovia Securities, was a bit more optimistic, saying he estimates the economy is four months away from the end of an average-length recession, so the stock market should resume its climb again soon.
“Basically, the market is taking a time-out after the prior six weeks,” Goldman said. “The bigger picture is a market that’s in the process of transitioning from a bear to a bull, shifting from a situation where the glass is half-empty to one where the glass is half-full. And that takes time.”
In a positive sign for the U.S. employment picture, which has seen four straight months of jobs losses, the Labor Department said Thursday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000 — a larger decline than expected.
Aluminum producer Alcoa rose $1.56, or 4.1 percent, to $39.65. Oil companies also gained; Exxon Mobil Corp. rose $1.11 to $89.93, while Chevon Corp. was up $2.11 at $97.44.
Wal-Mart rose 33 cents to $57.16, but Target Corp. fell $1.10, or 2.1 percent, to $52.34 after saying its same-store sales rose in April by an amount that was smaller than analysts forecast. Same-store sales are an important barometer of a retailer’s health that reflects sales at stores open at least a year.
A weak U.S. consumer weighed on Toyota Motor Corp., which said late Wednesday that profits in the January-to-March period tumbled 28 percent due to the rising yen and weak North American sales. The Japanese automaker also predicted sales will drop for the fiscal year through March 2009 for the first time in several years, and that earnings will fall 27 percent.
Toyota’s U.S.-traded shares fell $4.20 or 4 percent, to $100.56.
The Russell 2000 index rose 3.34, or 0.47 percent, to 719.55.
Advancing issues narrowly outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume amounted to a light 1.21 billion shares, compared with 1.28 billion shares traded Wednesday.
The European Central Bank left its interest rates unchanged Thursday. ECB President Jean-Claude Trichet pointed to clear upside risks to price stability, indicating that the bank is unlikely to lower its rates in the near future.