Stocks closed Monday’s seesaw session barely changed amid a broad retreat in commodities, which promoted some investors to shift money out of oil and raw materials-based companies and into other sectors.
With prices for commodities dropping, particularly crude oil, investors sold stock in companies including Exxon Mobil Corp. and aluminum maker Alcoa Inc., theorizing that other companies will now be paying less for raw materials, a trend that will help preserve corporate profits. Moreover, a decline in commodities could portend a drop in inflation.
Oil giant Exxon Mobil fell $1.87, or 2.8 percent, while Alcoa dropped $1.52, or 5.3 percent.
Also lifting stocks was a speech from St. Louis Federal Reserve President William Poole, who said he believes inflation is “pretty well controlled.” His comments soothed some of the market’s concerns about interest rates ahead of the Federal Reserve’s meeting on Sept. 20.
“The drop in oil prices is becoming a catalyst, as is other commodities, and giving people confidence to put money into areas that have somewhat been lagging such as technology,” said Scott Fullman, director of investment strategy for Hapoalim Securities. “Investors have been in commodity-based stocks, and you’re seeing a reallocation of capital within the market.”
He believes this will “continue unless it’s given a reason to reverse that trend, like if energy prices begin to rise again.”
With Monday the fifth anniversary of the Sept. 11, 2001, terror attacks, the New York Stock Exchange, which was shut for several days after the destruction of the nearby World Trade Center, observed a moment of silence for one minute before the opening bell. The Nasdaq Stock Market asked traders to suspend transactions for one minute later in the morning.
The Dow Jones industrial average closed the day up 4.73 points, or 0.04 percent, having slipped 0.6 percent last week. The broader Standard & Poor’s 500-stock index closed up 0.62 point, or 0.1 percent, while the Nasdaq composite index gained 7.46 points, or 0.3 percent.
The price of crude oil fell on the New York Mercantile Exchange, marking the sixth-straight day of declines, as OPEC said it would continue pumping crude at high rates to extend global supplies.
Wall Street had very little in the way of economic data to latch on to. In addition to Poole’s comments, there was some encouragement after Federal Reserve Bank of Boston President Cathy Minehan said in a speech the economy should slow in coming months and reduce inflationary pressures.
Stocks could move this week on retail sales figures due Thursday, and quarterly reports from Wall Street investment banks that begin on Tuesday with Goldman Sachs Group Inc.
There continue to be questions that the Fed went too far with 17 straight rate increases over two years, and that a soft landing of the economy might be harder to achieve. Investors have been gauging a series of economic reports during the past few weeks, and speeches by Fed officials, to determine what the central bank might do later this month.
The technology sector got a big boost after Freescale Semiconductor Inc. confirmed it might be in talks about a possible deal. It jumped $6.31, or 20.5 percent, to $36.06.
The move into tech shares even helped Dell Inc. recover some of its losses after the computer maker said it would delay a quarterly filing with the Securities and Exchange Commission amid questions about its accounting. The stock — down as much as 4 percent in morning trading — fell 46 cents, or 2.1 percent, to $21.19.
Shares of Bank of America Corp. fell 48 cents to $51.18 after securities firm UBS downgraded the nation’s largest retail bank on signs of weakening credit and eroding deposit trends. BofA announced it would acquire healthcare technology company HeathLogic Systems Corp. for an undisclosed sum.
Canadian steelmaker Ipsco Inc. said it will acquire NS Group Inc. for about $1.46 billion in cash. Ipsco dropped $6, or 6.4 percent, to $87.20; NS surged $18.16, or 39.4 percent, to $64.31.
Overseas, Japan’s Nikkei stock average fell 1.8 percent. At the close, Britain’s FTSE 100 was down 0.5 percent, Germany’s DAX index was up 0.1 percent and France’s CAC-40 index shed 0.3 percent.