Markets & Finance

Stocks Rise as Oil Prices Fall


Crude futures tumbled below $61 on warmer weather forecasts, while an early report projected disappointing holiday retail sales

Stocks finished higher Tuesday in moderate post-Christmas trading, as a drop in crude oil prices countered a lackluster early projection for holiday sales. No major economic reports were due this session, as traders awaited Wednesday's housing data.

On Tuesday, the Dow Jones industrial average rose 64.41 points, or 0.52%, to 12,407.63, helped by General Motors (GM) and Wal-Mart (WMT). The broader Standard & Poor's 500 index added 6.15 points, or 0.44%, to 1,416.91. The tech-heavy Nasdaq composite was up 12.33 points, or 0.51%, to 2,413.51.

NYSE breadth was positive, with 23 issues advancing for every 10 declining. Nasdaq breadth was 19-11 positive.

Investors looked past a disappointing initial reading on holiday sales Tuesday. U.S. holiday retail sales rose 6.6%, less than expected, for the period between Thanksgiving and Christmas, according to MasterCard SpendingPulse data.

Meanwhile, the Richmond Federal Reserve's overall business activity index fell to -6 in December after rising 9 points to 7 in November.

Looking ahead, Wednesday's release of November new home sales is forecast to rise 2.6% to 1.030 million units, according to Action Economics. Thursday's calendar holds data on weekly jobless claims, consumer confidence, and existing home sales, ahead of Friday's Chicago-area manufacturing report.

Among stocks in the news, automakers gained amid reports that top Ford (F) and Toyota (TM) executives held talks in Tokyo.

Shares of Goodyear Tire & Rubber (GT) hit a 52-week high on news of a tentative agreement with the United Steelworkers union.

Microsoft (MSFT) was higher following a report the software giant is making a worldwide push to sell targeted online advertisements based on data obtained from its Hotmail e-mail service users.

Midwest Air Group (MEH) hired Goldman Sachs as an advisor following a recent decision by the airline's board to decline an unsolicited buyout offer.

In other M&A news, Anadarko Petroleum (APC) agreed to sell its Vernon and Ansley fields, located in Jackson Parish (La.), to Exco Resources (EXCO) for $1.6 billion.

Elsewhere, GlaxoSmithKline (GSK) said the FDA issued an approvable letter for its Altabax topical antibacterial.

Amylin Pharmaceuticals (AMLN) and Eli Lilly (LLY) announced the FDA approved their Byetta diabetes drug as an add-on therapy to improve blood sugar control in people with type 2 diabetes.

Electronics retailer Best Buy (BBY) opened its first store in China.

In the energy markets, February West Texas Intermediate crude oil futures fell $1.31 to $61.10 a barrel amid mild U.S. weather forecasts, despite Iran's nuclear defiance.

Most European markets were closed after the Christmas holiday. On Friday, the FTSE-100 index in London rose 6.3 points, or 0.1%, to 6,190. Germany's DAX index fell 70.83 points, or 1.08%, to 6,503.13. In Paris, the CAC 40 index was down 56.45 points, or 1.02%, to 5,453.94.

Asian markets ended mixed. In Japan, the Nikkei 225 index gained 76.3 points, or 0.45%, to 17,169.19, a seven-month high. Korea's Kospi slipped 3.57 points, or 0.25%, to 1,433.92. In Hong Kong, the market was closed after the Hang Seng index on Friday advanced 97.68 points, or 0.51%, to 19,320.52.

Treasury Market

Treasury yields ticked lower in light post-holiday trading. The 10-year note rose modestly in price to 100-06/32 for a yield of 4.61%, while the 30-year bond advanced to 96-10/32 for a yield of 4.74%. Some short-covering and dip-buying helped give the market a slight boost, along with talk of disappointing holiday retail sales, says Action Economics.

Hogan is a reporter for BusinessWeek.com in New York.

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