Upbeat sentiment about falling oil prices flagged amid ongoing concerns about weak credit markets and the economy.
Investors were encouraged early in the session as oil’s pullback lifted the outlook for consumer companies and eased concerns that record-high energy prices would force Americans to curb spending. Light, sweet crude dropped $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange.
Oil fell on a growing sense that economies around the world are joining the U.S. in a slowdown. The rising dollar, which is gaining strength on economic concerns, contributed to the sell-off in crude and other commodities. Crude is down about $35 from its July 11 record of $147.27; meanwhile, gold prices that swept past $1,000 an ounce earlier this year are now below $800.
Although the decline in oil was placating investors this week, it still did not offset their ever-present anxiety over the slumping housing and credit markets. Concerns about more write-downs at investment banks continued, causing major market indexes to fluctuate during the week; the Dow Jones industrials continued a volatile streak, dropping more than 100 points two days in a row amid intensifying fears about the health of the financial sector.
The Dow Jones Industrial Average rose 43.97, or 0.38 percent, to 11,659.90. Broader indexes were narrowly mixed. The Standard & Poor’s 500 Index rose 5.26, or 0.41 percent, to 1,298.20, while the Nasdaq Composite Index fell 1.15, or 0.05 percent, to 2,452.52.
For the week, the Dow finished down 0.63 percent and the S&P 500 rose a modest 0.15 percent. The tech-focused Nasdaq, however, logged its fifth-straight weekly gain by finishing up 1.59 percent; it has risen 8.5 percent since mid-July.
The market has been trying to sort through a number of factors, including the price of oil and other commodities, ongoing concerns about the state of the credit markets and varying economic data. Investors seem to be grabbing on to any piece of news that might signal a turnaround for the economy.
The Nasdaq’s performance this week indicates that investors are rotating back into technology stocks. However, the market has had little motivation to move into other sectors - and analysts said many traders are simply buying into the dips.