- The Washington Times - Wednesday, December 28, 2005

NEW YORK (AP) — Rising oil prices and the return of a bond market anomaly cut into Wall Street’s early gains yesterday, leaving stocks with only a modest advance.

The market pulled back in response to a jump in crude oil prices. Oil gained after Iran’s oil minister was reported to have said the Organization of Petroleum Exporting Countries should consider lowering its output by 1 million barrels a day at its Jan. 31 meeting. A barrel of light crude settled at $59.82, up $1.66, in trading on the New York Mercantile Exchange.

Investors also worried about the bond market. Stocks fell Tuesday after yields on long-term bonds dropped below those on short-term bonds, a condition called an inverted yield curve that often precedes economic slowdowns. The yield curve last inverted in 2000.

Yesterday, some short-term bond yields beat longer-term bond yields, but Wall Street seemed less concerned. Tuesday’s inverted yield curve sparked a sell-off in equities, with the Dow falling 105.50, or 0.97 percent.

The Dow Jones Industrial Average rose 18.49, or 0.17 percent, to 10,796.26.

Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index rose 1.63, or 0.13 percent, to 1,258.17 and the Nasdaq Composite Index rose 2.05, or 0.09 percent, to 2,228.94.

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