Mon, May 12 2008
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Published May 06, 2008 03:37 pm - Crude oil climbed past $122 a barrel on the New York Mercantile Exchange Wall Street moves higher despite oil hike Stocks reversed early losses to trade modestly higher Tuesday, as investors monitored the movements of record-high oil prices but still laid bets that the economy and companies are in recovery mode.
Crude oil climbed past $122 a barrel on the New York Mercantile Exchange as traders, who have nearly doubled the price of oil over the past year, reacted to the weakening U.S. dollar, supply threats, and a note from Goldman Sachs predicting that oil could reach $200 a barrel. High oil prices threaten to crimp consumers' discretionary spending. But by midday the stock market pared its morning losses, as oil price sticker-shock waned and as investors looked past wider-than-expected quarterly losses at Swiss bank UBS, government-sponsored mortgage company Fannie Mae and homebuilder D.R. Horton Inc. Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said it is a good sign that stock traders started buying back in again when the Standard & Poor's briefly dipped below the technically significant 1,400 mark. "We had some negative news this morning, and we've shaken it off. It's encouraging," Detrick said. In recent weeks, stronger-than-expected results from companies outside the battered financial and housing sectors helped the stock market rebound to levels not seen since early January. Tuesday's gains were modest, however, as Wall Street awaits quarterly results from computer networking equipment maker Cisco Systems Inc. after the market closes. "I think overall, the strength in stocks right now is on fairly firm footing," said JPMorgan equities analyst Thomas J. Lee. He said there's still plenty to worry about, notably high oil prices and the weak housing market. But economic data has been better than expected — particularly Friday's employment report and Monday's data on the service sector — and meanwhile, the credit markets keep showing increased appetite for risk. "In some ways, first-quarter earnings are yesterday's news," Lee said. 
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