December 4, 2021

Stocks and Bonds: As Commodities Rebound, Major Indexes Close Higher

The Standard Poor’s 500-stock index rose 0.49 percent, or 6.57 points, to 1,348.65, reversing a decline from earlier in the day. The Dow Jones industrial average added 65.89 points, or 0.52 percent, to 12,695.92. The Dollar Index, which tracks the currency against the currencies of six major trading partners, declined 0.2 percent, to 75.19. The Nasdaq rose 17.98 points, or 0.63 percent, to 2,863.04.

“The more commodity-sensitive industries have been driving the market either up or down,” said Wasif Latif, vice president for equity investments at USAA Investment Management in San Antonio. “One sector’s gain could be another sector’s pain. The recent decline in oil may not be that good for energy companies. However, consumer staples will do better because of lower input costs.”

The S. P. 500 has fallen 1.1 percent this month as gauges of energy and raw materials producers have slumped at least 4.2 percent. Still, the index is up 7.2 percent this year amid government stimulus measures and higher-than-estimated profits.

Earlier in the day, stocks fell after China raised reserve ratios for its largest lenders by 0.5 percentage point to a record 21 percent. The central bank’s announcement followed reports on Wednesday showing inflation and lending exceeded economists’ estimates in April, with consumer prices rising more than 5 percent for a second month.

Commodities rebounded from earlier losses as the dollar reversed a gain, bolstering the appeal of energy and raw-materials as alternative investments.

Cliffs Natural Resources, a large iron-ore producer, gained 1.7 percent to $87.19. Schlumberger, the oil-field services provider, added 1.5 percent to $83.52.

Symantec climbed 5.2 percent to $20.42. The company, a maker of security software, forecast higher revenue than analysts had predicted, bolstered by demand for data backup cloud-computing programs, and the effect of a weaker dollar on overseas sales.

Tyson added 4.6 percent, to $18.84, after it said it planned to buy back up to 22.5 million shares.

Cisco Systems tumbled 4.8 percent to $16.93. The company is revamping management and scaling back some businesses after losing share to rivals like Hewlett-Packard.

The yield on Treasury’s 10-year note rose to 3.22 percent, from 3.16 percent late Wednesday.

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Stocks & Bonds: Shares Slip as Oil Prices Jump on Libya Tensions

Crude prices have surged as the fighting in Libya, an OPEC member, has appeared to turn into stalemate, analysts said.

“What you really have is fear and the unknown running ahead of the facts,” said Mark  Routt, a senior staff consultant with KBC Advanced Technologies, a consulting firm.

On Friday, crude oil for May delivery rose $2.49, or 2.3 percent, to $112.79 a barrel on the New York Mercantile Exchange, while Brent crude jumped $3.98, or 3.2 percent, to $126.65.

A weaker dollar also kept prices elevated, and energy shares on Wall Street closed higher. But the biggest driver of oil prices was a growing perception among traders that the conflict in Libya might not end any time soon, KBC said in an energy outlook.

Blake Hutchinson, an oil field services analyst at Howard Weil, said that the markets had “written off” Libyan production. Reports of damage to oil fields have heightened fears that output could be disrupted for longer than initially forecast, possibly for years.

“When you kill an oil field, sometimes you kill it for good,” Mr. Hutchinson said. “You have gone from production offline” to production that might never exist again.

Mr. Routt of KBC said that “until we get a technical assessment of the damage, we are not going to know what the impact is going to be, and until we get that knowledge the markets are running ahead of themselves.”

Since the beginning of the turmoil in Libya, Saudi Arabia, along with its gulf neighbors, the United Arab Emirates and Kuwait, have raised production to offset the loss of Libyan oil exports.

But the increase has done nothing to dampen oil prices, the KBC analysis said, because traders are worried about the political stability of many Middle Eastern states, which are among the largest producers in the Organization of the Petroleum Exporting Countries.

Stock prices closed moderately lower on Friday as investors monitored energy and currency markets.

The Dow Jones industrial average fell 29.44 points, or 0.24 percent, at 12,380.05, while the broader Standard Poor’s 500-stock index lost 5.34 points, or 0.40 percent, to 1,328.17. The Nasdaq composite index declined 15.72 points, or 0.56 percent, to 2,780.42.

The Dow was little changed on the week, while the S. P. and the Nasdaq were slightly lower.

Energy shares bucked the market trend to close higher.

The oil drilling company Nabors Industries rose $1.06, or 3.48 percent, to close at $31.56. A rival, Helmerich Payne, gained $1.44, or 2.13 percent, to $68.94, and Anadarko Petroleum was up $1.37, or 1.64 percent, to $84.71.

Amid a threatened government shutdown in the United States, the dollar weakened. The euro rose to $1.4435 from $1.4297 on Thursday.

Interest rates were higher. The Treasury’s benchmark 10-year note fell 9/32, to 100 12/32, and the yield rose to 3.58 percent from 3.55 percent on Thursday.

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