Stocks climb as oil prices ease

By 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. 

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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.

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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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