Stocks Close Higher After Obama Calms Nervous Markets on Iraq

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Stocks rose on Friday after President Obama calmed nervous investors by saying American troops would not be sent to Iraq, where fighting has raised concerns about oil supplies.

The Dow Jones Industrial Average, which fell over 100 points on Wednesday and Thursday and was down in early trading, rallied after Obama's comments and closed unofficially 41 points ahead. The S&P 500 gained 6 points and the Nasdaq ended 13 points higher.

Obama offered an update on the situation in Iraq, with the president saying the United States was offering Iraq's government logistical support, but would not be sending troops back into that country.

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"We'll be monitoring the situation very carefully over the next couple of days," Obama told a televised news conference. "So far we have not seen major disruptions in oil supplies," the president said in response to a reporter's question.

Earlier, Secretary of State John Kerry said he expects Obama to make "timely decisions" on Iraq, given the gravity of the insurgency in a nation that produces about 3.3 million barrels of crude a day.

"There is concern that a spike in oil prices already at elevated levels could choke off consumer spending," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"With militants headed to Baghdad, and likely to be there "in the next couple of days, you go into the weekend with potential fireworks -- who knows what the price of oil will be Monday morning," said Peter Boockvar, chief market analyst at The Lindsey Group.

Data Friday showed producer costs dropped in May, casting a benign light on inflation. The Thomson Reuters/University of Michigan reading on U.S. consumer sentiment in June came in at 81.2 - below expectations.

Intel shares climbed over 6 percent after the semiconductor maker hiked its second-quarter revenue outlook. Citigroup fell after Bloomberg reported the Justice Department had asked the bank for more than $10 billion to settle an investigation into the lender's sale of mortgage-backed bonds ahead of the 2008 financial crisis.

On the New York Mercantile Exchange, crude futures for July delivery rose 38 cents, to settle at $106.91 a barrel; gold added 10 cents to $1,274.10 an ounce.

The dollar gained and the 10-year Treasury yield held at 2.605 percent.