New York – Rising oil prices and the return of a bond-market anomaly cut into Wall Street’s early gains Wednesday, 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 the 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.
On Wednesday, 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.
Still, “the yield curve has people on edge,” said Peter Cardillo, chief strategist, senior vice president and market analyst at S.W. Bach & Co. “It’s certainly keeping the market in a tight trading range.”
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.
The Bloomberg Colorado Index, a price- weighted list of companies based in the state, rose 1.97 to 326.90.
Bonds fell, with the yield on the 10-year Treasury note rising to 4.37 percent from 4.34 percent late Tuesday.
The U.S. dollar gained against other major currencies. Gold prices were higher.
Stocks received an early boost from the Conference Board’s report that consumer confidence surged in December. The reading, which improved because of declining gasoline prices and better job opportunities, is nearing its August levels, before Hurricane Katrina.
