Stocks climb as oil prices ease

The IEA vows to release excess inventory if the Libya crisis hurts supplies. US GDP grows less than expected. Boeing rallies on a tanker contract. Gold prices drop.

By TheStreet Staff Feb 25, 2011 8:40AM

Image: Wall Street sign (© Comstock Images/age fotostock)TheStreetBy Melinda Peer, TheStreet

 

Updated at 12:39 p.m. ET

 

Stocks were rising Friday as oil prices eased after oil-producing nations vowed to release reserves if violence in Libya disrupts supplies.

 

At 12:39 p.m., the Dow Jones Industrial Average ($INDU) was up 52.8 points, or 0.4%, at 12,121. The S&P 500 ($INX) was up 113. points, or 0.8%, at 1,317 and the Nasdaq ($COMPX) was rising 36.2 points, or 1.3%, to 2,774. 

 

Oil came down from $100 a barrel after the International Energy Agency said it would release excess oil inventory if the conflict in Libya hurts supplies. President Barack Obama also said the U.S. would be able to withstand any supply disruptions. Reports that Saudi Arabia was working on compensating for the shortfall in Libyan oil production also eased concerns. 

The North African country has been divided amid political unrest against Moammar Gadhafi's long rule. Crude oil for April delivery was falling 7 cents to $97.28 a barrel.

 

The U.S. economy grew by 2.8% in the fourth quarter, according to the Labor Department's second estimate. The fourth-quarter expansion was downwardly revised from the government's initial estimate for growth of 3.2%, and well below the increase of 3.3% that economists had been expecting, according to Briefing.com. U.S. gross domestic product grew 2.6% in 2010's third quarter.

 

Paul Ballew, economist at Nationwide Insurance, said the latest estimates confirmed that the recovery will be slow. ”The recovery has a lot of weight on its back. It will be gradual and choppy,” said Ballew who expects the economy to grow at 3% to 3.2% in 2011. He said imbalances that triggered the recession would take a long time to correct. “We are still seeing a drag from housing. The residential sector typically contributes 10% to 12% of GDP. We are getting no contribution from that sector.”

 

Markets received a more positive reading on consumer sentiment. The Michigan Consumer Sentiment Index rose to 77.5 in February, its highest level in over three years. Economists were expecting the reading to remain unchanged at 75.1.

 

Hong Kong's Hang Seng jumped 1.8%, and Japan's Nikkei added 0.7%. London's FTSE was gaining 1.5%, and the DAX in Frankfurt was ahead by 0.9%. 

 

Shares of Boeing (BA) were gaining 2.3% at $72.40 after the aircraft maker won a $35 billion contract to build aerial refueling tankers for the Air Force late Thursday.

 

Bank of America (BAC), DuPont (DD) and Intel (INTC) were also leading on the Dow. Johnson & Johnson (JNJ)Wal-Mart (WMT) and Chevron (CVX) were the biggest losers on the Dow.

 

American International Group (AIG) said late Thursday that it posted a profit in the fourth quarter. AIG reported net income of $16.60 a share, compared with a loss of $65.51 a year earlier. However, the gains came largely from the sales of its overseas unit, with its core insurance business turning a weaker performance. Shares were down 5.8% to $38.08.

 

Late Thursday, Salesforce.com (CRM) hiked its full-year sales outlook after exceeding Wall Street's expectations with adjusted earnings of 31 cents a share on sales of $457 million. The stock was adding 3.8% to $139.40.

 

Shares of Interpublic (IPG) was the biggest gainer on the S&P after it said it would buy back $300 million of its shares. The stock was up 7.8% at $12.53.

 

The April gold contract was falling by $8.30 at $1,407.50 an ounce.

 

The benchmark 10-year Treasury was down by 4/32, lifting the yield to 3.462%. The dollar strengthened against a basket of six currencies, with the dollar index up by 0.2%.

 

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199Comments
Feb 25, 2011 11:26AM
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Man those Republicans mean it when they say if you don't want to get behind our troops, feel free to get in front of them.  This my way or the highway B.S. is bordering Fascism.

 

They've been Fascists for many many years now!

Feb 25, 2011 11:23AM
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Old abe, obviously you are not old enough to remember or too old to remember....

50's were great times,60's were great times,70's were great times economically. Unions were strong the middle class was strong.. fact.

1980- 1992 republican rule of the white house-reaganomics the destruction of the middle class begins, effects not felt right away but now 2 incomes needed to sustain a household the rich getting richer and union busting and the media bash middle class union workers, not the 2% problem..Clinton 92-2000. republican houses 94- 2000--so the country is still keeping reaganomics going, rich getting richer but Americans are optimistic so it is all good..Bush2000-2008--Transfer of wealth to the top 80% pay raise for 2%, 8 million jobs lost and if you have a job you need to take a pay cut--middle class only---

 So yes if sheeple want to believe that 45k yearly is so bad then why is 135 billion alright for wall street compensation for 2010 ???????????????????? And let people starve no morals people, Jesus is for sure a liberal...........He is for people eating not greed..

Feb 25, 2011 11:21AM
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New permits are being issued.

No, they aren't.

Just because you proclaim Obama incompetent in foreign affairs doesn't make it so.

Are you taking the position that he is competent?
Feb 25, 2011 11:19AM
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cowboy...you  really sound like deklen...maybe you are deklen...it is always the righties fault or someone else's fault with you and with deklen
Feb 25, 2011 11:18AM
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Here's the Illinois take on the Wis situation. Read this with an open mind.

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-union-20110217,0,7977108.story

Wis is just one of many states that ran out of other people's money.

 

Feb 25, 2011 11:17AM
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Brutus ;;  Just because you proclaim Obama incompetent in foreign affairs doesn't make it so.  Mssr. Bush demonstrated his incompetence over and over.  As for oil permits, it was reasonable to install a temporary moratorium after the BP disaster.  New permits are being issued.
Feb 25, 2011 11:15AM
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price checks are handy.  i gassed up yesturday in southern california for $3.50 a gallon.  2 weeks prior i got gas for $3.20.  TV new last night showed several stations changing their price to near $4.  if i owned a gas station i'd certainly jump on this price change.  i could hide some quick cash under "oil" increases and not get busted for price gouging!  "hey, i saw it on TV news!"

 

glad i drive a hybrid

Don't forget we still have Spring Break, Easter weekend,Summer and Summer fuel regs, Hurricane Season, just to name a few of good old time fuel excuses to RISE!!! So nice to have things to look forward to!!!
Feb 25, 2011 11:13AM
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All Republicans that are in government should quit immediately, since they don't believe in big government. Since government is the problem for you Republicans, then stop running for government positions.

Feb 25, 2011 11:09AM
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So Scott Walker thought about sending in thugs to disrupt the peaceful demonstrations in Wisconsin.  One of the attorneys General in Indiana tweeted a suggestion to use live ammo.  Man those Republicans mean it when they say if you don't want to get behind our troops, feel free to get in front of them.  This my way or the highway B.S. is bordering Fascism.
Feb 25, 2011 11:07AM
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When Obama took office 2 years ago, gas prices were at $1.83/gallon.  While he shouldn't get all of the blame (or credit, depending on your ideology)  for the meteoric rise in oil and gas prices, he should accept a portion of it.  His incompetence in handling foreign affairs and relations isn't helping matters.  And then his people at the Dept of Energy and the EPA refuse to consider or issue any new drilling permits and will continue this practice indefinitely.  Because of this, we have lost huge numbers of offshore rigs and huge amounts of infrastructure that is necessary to continue and expand domestic oil production.  And don't forget his campaign promise that if his policies were implemented, "energy prices would necessarily skyrocket".  Well skyrocket they have, and we will all suffer for it. 

In the future, there will probably be an interesting historical debate, which was worse - a naive peanut farmer from Georgia or a radical community organizer from Chicago.
Feb 25, 2011 11:06AM
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Colorado - I wish I only contributed 5.8% toward retirement and 12% toward health care. Oh the humanity for destroying the middle class in Wis by asking for this. It is certainly obvious who sold their vote to the union. 
Feb 25, 2011 11:06AM
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Frreddd    I'm with ya on that high gas at the Marina.  I have twin 350's on  315 Cruiser.  Those 500$ fillups are rough.
Feb 25, 2011 11:03AM
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Two Sick:   "Thanks Obama"  - really?  He's to blame for high gas prices?   It's his fault that people in the Middle East want to be free of dictators?  Don't forget to thank Thomas Jefferson.
Feb 25, 2011 10:59AM
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Funny outlook, I do not even know anyone getting anything from the government. Obvious what you state but righty's have a sheeple type of opinion on everything. Government is bad but if righty's were not such followers of the corporate hand fed messages they would realize that giving everything to the top 2% does nothing but make 98% poorer DUH that includes you funny outlook. but sheep know nothing but what is hand fed to them.....
Feb 25, 2011 10:54AM
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Alternative energy for me this spring, summer and fall is riding my bicycle (anywhere possible) just like I did  when I was a kid.

 

 

 

That way $3,$ 4 or $ 5 dollar gas per gallon,  for the most part can stick it!

Feb 25, 2011 10:54AM
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I am with miragy get rid of the gas tax so we can privatize all roads and make them toll roads the only other option or get rid of roads entirely---
Feb 25, 2011 10:50AM
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cowboy...Why is it that you think the 400 richest families do not deserve what they have? Every man and woman in this country has the opportunity in life if they take it to be successful and get rich....that is what sets the USA apart from a lot of nations.....it all has to do with the drive inside a person to get there. I do not like the destruction of the  middle class going on in this country but to constantly blame it on the rich is just not fair. What wealth (or poor) status you have has nothing to do with values. All the talk out of the current administration about redistributing the wealth in this country is not good for the middle class either. People in this country need to start taking care of themselves and stop looking to the government to take care of them. I truly believe that everyone is where they want to be in life, some just don't want what others may or they do not take advantage of what they have inside them to make it happen.

Feb 25, 2011 10:47AM
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What?? the market is not functioning efficiently? Sometimes I wonder, Which should we should give up. I think that these are pretty average for where I live.

Real Estate Tax                              $5,000

Real Estate Insurance                  $   900

HOA                                                   $  500

Total RE expenses                        $6400

 

Car Gas                                           $5200  (at 3.08/gal two cars)

Insurance car (two)                        $1740

Total Car                                           $6940

Total for car and RE                      $12840

 

Total Income Tax                           $10,500

                    

Feb 25, 2011 10:47AM
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Gas prices...

 

Want them lower by a buck, get RID of the gas tax.  I know the liberals will argue, we need the money for roads, but after all the shovel ready infrastructure money blown repaving roads, we can go without for awhile...

 

Also, in a few weeks, we will be paying another 20-25 cents a gallon for EPA mandated 'Summer" formulation.   we could eliminate this this year...

 

Perhaps we should just buy oil company stocks, and enjoy our spend our profits on gas...

 

Or maybe we should USE LESS?  Maybe someone will develop an alternative.   But lets not have the government throw taxpayer dollars down multiple rat holes that will not pan out....Considering we have been doing just that since Carter tell me stop reinforcing failure...

Feb 25, 2011 10:42AM
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Futures are up on Wisconsin passing the bill taking a step towards killing the middle class. The average union worker gets 45k yearly--wow that's is way too much--yet the 400 richest families in the U.S. is worth more than 150,000,000 Americans a hundred and fifty million on the bottom but that is alright--What a messed up set of values this country has--that is why you are going to see it continue to slide to a 3rd world country--so no crying with values like that and voting in people who strip the middle class of dignity.......................
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