NEW YORK — Wall Street advanced Monday but gave back some of its gains after crude- oil prices pulled off their lows and the Federal Reserve said more banks are tightening lending standards.
Oil’s big drop over the past month has eased investors’ concerns about the drag of rising prices on the economy, but its move off its lowest levels Monday deflated a stock-market rally that was building upon steep gains from last week. Light, sweet crude still fell 75 cents to settle at $114.45 per barrel on the New York Mercantile Exchange after dipping to $112.72, its lowest price since early May.
The Dow Jones industrials, up more than 130 points in afternoon trading, ended the day up 48.03, or 0.41 percent, at 11,782.35 after rising more than 300 on Friday.
The Fed’s report reminded investors that the nation’s credit situation is still deeply troubled. The central bank said about 75 percent of the banks it surveyed in July had increased requirements for prime mortgages, up from about 60 percent in April. The tighter standards can make it more expensive and difficult for borrowing that could stimulate the economy.
Falling oil prices and the continuing problems in the financial sector have competed for Wall Street’s attention in recent sessions, with oil’s pullback sending stocks higher and credit-related news tending to limit or halt the rallies.
Jim Hardesty, president of Hardesty Capital Management in Baltimore, said the overall decline in oil takes some pressure off the economy.
“We have a speculative bubble in prices that’s giving way to what now I think are more moderate levels,” he said, referring to oil’s surge higher this year. “I think we can look forward to a resumption of an improvement in equity prices based on still- good earnings coming out of many companies.”
Broader stock indicators also advanced Monday. The Standard & Poor’s 500 index rose 9.00, or 0.69 percent, to 1,305.32. The Nasdaq composite index rose 25.85, or 1.07 percent, to 2,439.95, after Amazon jumped $7.58, or 9.4 percent, to $88.09 following release of upbeat comments from analysts.
The drop in oil prices, which have fallen more than $30 from their July 11 high of $147.27, has alleviated some of Wall Street’s worries about inflation and its effect on spending. Oil traders on Monday appeared to set aside uneasiness about fighting between Russia and Georgia that had raised the possibility of supply disruptions in the region; they focused instead on a rising dollar and a report from China that its crude-oil imports fell significantly in July.
Ryan Larson, senior equity trader at Voyageur Asset Management, said the final moves by oil appeared to turn some investors more cautious, as did the Fed report.
“You see a little steam coming out of equities,” he said, pointing to the effect of oil’s partial recovery. “People are trying to lock in some moves.”
