NEW YORK – Wall Street inched higher Monday as a broad retreat in commodities prompted investors to shift money out of oil and raw materials-based companies and into other stock sectors.
The Dow Jones industrial average rose 4.73, or 0.04 percent, to 11,396.84, after moving in and out of positive territory during erratic afternoon trading. The Dow slipped 0.63 percent last week.
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Broader stock indicators also closed higher. The Standard & Poor's 500 index added 0.62, or 0.05 percent, to 1,299.54, and the Nasdaq composite index rose 7.46, or 0.34 percent, to 2,173.25.
Falling prices for petroleum and metals led to declines in shares of commodities producers; Exxon Mobil Corp. (XOM) and Alcoa Inc. (AA), both Dow Jones Industrial components, were among the session's biggest decliners.
The six-day slide in crude prices, which closed under $66 per barrel Monday, was welcomed by Wall Street as a sign inflation will be kept under control. Cheaper oil also could help boost consumer spending, as well as corporate profits.
Investors have been looking for any direction about the state of the economy, but have also traded with relatively little conviction, ahead of the Federal Reserve's next meeting Sept. 20. St. Louis Fed President William Poole said in a speech Monday that inflation is "pretty well controlled," but offered little else about the economy.
Bonds edged lower, with the yield on the benchmark 10-year Treasury note rising to 4.80 percent from 4.78 percent on Friday. The dollar was mixed against other major currencies, while gold prices fell below $600 an ounce for the first time in more than two months.
Oil fell again Monday as OPEC said it would continue pumping crude at high rates to extend global supplies. The price of light sweet crude fell 64 cents to $65.61 per barrel on the New York Mercantile Exchange, marking the sixth-straight day of declines.
"The drop in oil prices is becoming a catalyst, as is other commodities, and giving people confidence to put money into areas that have somewhat been lagging such as technology," said Scott Fullman, director of investment strategy for Hapoalim Securities. "Investors have been in commodity-based stocks, and you're seeing a reallocation of capital within the market."
He believes this will "continue unless its given a reason to reverse that trend, like if energy prices begin to rise again." Excluding that, he expects oil companies — which have been rich with profits during the past year and has had among Wall Street's most steady stock returns — will continue to decline.
Exxon Mobil fell $1.87, or 2.8 percent, to $64.94, while Alcoa declined $1.52, or 5.3 percent, to $27.16. Both companies are also influential members of the S&P 500.
Trading volume, while moving above the light summer levels seen last week, still remained sluggish with little corporate or economic reports to start the week with. Some direction about the economy might come with retail sales figures due Thursday.
Investors are trying to determine if the Fed went too far with 17 straight rate increases over two years, and that a soft landing of the economy might be harder to achieve.
With oil and metals companies losing ground during on Monday, investors appeared to have moved into the tech sector. Freescale Semiconductor Inc. led the advancers after confirming its in talks about a possible deal. The stock jumped $6.31, or 21 percent, to $37.06.
The bounce in tech shares also helped Dell Inc. recover some of its losses after the computer maker said it would delay a quarterly filing with the Securities and Exchange Commission amid questions about its accounting. The stock fell 46 cents, or 2.1 percent, to $21.19.
Bank of America Corp. (BAC) fell 48 cents, or 0.9 percent, to $51.18a after securities firm UBS downgraded the nation's largest retail bank on signs of weakening credit and eroding deposit trends. BofA announced it would acquire healthcare technology company HeathLogic Systems Corp. for an undisclosed sum.
Canadian steelmaker Ipsco Inc. (IPS) said it will acquire NS Group Inc. (NSS) for about $1.46 billion in cash. Ipsco dropped $6, or 6.4 percent, to $87.20; NS surged $18.16, or 39 percent, to $64.31.
Trading volume, while moving above the light summer levels seen last week
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where volume came to 1.68 billion shares, compared to 1.32 million traded at the same time Friday.
The Russell 2000 index of smaller companies declined 1.10, or 0.16 percent, to 707.44.
Overseas, Japan's Nikkei stock average closed lower by 1.78 percent. At the close, Britain's FTSE 100 dropped 0.48 percent, Germany's DAX index rose 0.06 percent, and France's CAC-40 was shed 0.30 percent.
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