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Petroleum industry

Stocks Rise as Oil Prices Offset Worries Over Economic Recovery

Strategic Insights

— 2 min read

Stocks closed higher Wednesday for the first time this week, as rising oil prices helped offset concerns about the global economic recovery. The rally came despite worries over Europe's debt crisis and a report that Japan's exports fell by 12.5 percent in April. Higher prices for copper, silver, and other commodities lifted miners and other material companies. Energy stocks, in particular, saw a boost, with Cabot Oil and Gas Corp. leading the S&P 500 with a 7 percent gain.

Key Takeaways:

  • Oil prices rose nearly $2 to settle at $101.32 per barrel, driving energy stocks higher.
  • Cabot Oil and Gas Corp. led the S&P 500, rising 7 percent due to the increase in oil prices.
  • Higher prices for copper, silver, and other commodities lifted miners and other material companies, with Freeport-McMoRan Copper & Gold Inc. gaining 2 percent.
  • Greece's government and opposition party failed to reach an agreement on how to pare the country's debts, adding to uncertainty surrounding Greece's financial future.
  • Many analysts believe Greece will eventually have to restructure its debt, possibly by extending interest payments or lowering interest rates.
  • Without restructuring, Greece might default, causing a domino effect that would raise borrowing rates for larger European countries and hamper the world economy.
  • Japan's government reported that the country's exports fell by 12.5 percent in April after the March 11 earthquake and tsunami shuttered factories and forced manufacturers to stop production.
  • Stocks had been on a steady climb since last August until the Japanese catastrophe shook global financial markets in March.
  • The S&P 500 closed at 1,363 on April 29, its highest level of the year, and has drifted lower ever since.
  • Some analysts say the market may have been rising too far, too fast since the beginning of the year, making stocks seem expensive.

Statistics:

  • Oil prices rose nearly $2 to settle at $101.32 per barrel.
  • Cabot Oil and Gas Corp. led the S&P 500 with a 7 percent gain.
  • Freeport-McMoRan Copper & Gold Inc. gained 2 percent.
  • Japan's exports fell by 12.5 percent in April.
  • Japan's auto shipments dropped 67 percent in April.
  • The S&P 500 closed at 1,363 on April 29, its highest level of the year.
  • The Dow is still up 7 percent for the year.
  • The S&P 500 is up 5 percent for the year.
  • 300 million AIG shares were sold by the U.S. Treasury Department for $29 each.

Sources:

  • Associated Press
  • Silvant Capital Management
  • JPMorgan
  • The Blackstone Group
  • Martha Stewart Living Omnimedia
  • CF Industries
  • Polo Ralph Lauren Corp.
  • Costco Wholesale Corp.
  • American International Group Inc.

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