Wall Street closed higher on Wednesday after two straight days of declines, as a rise in oil prices lifted energy shares after the United States and its allies appeared prepared to attack Syria, heightening concerns over global oil supplies.
By the end of trading, the Standard Poor’s 500-stock index and the Dow Jones industrial average were 0.3 percent higher and the Nasdaq composite was up 0.4 percent.
Selling pressure waned on equities in the wake of Tuesday’s sell-off, the market’s worst day since June. The slide was prompted by tensions over a possible military response to a chemical weapons attack on Syrian civilians that the United States and its allies blamed on President Bashar al-Assad’s government.
The S. P. 500 index fell 2 percent in the prior two days and the C.B.O.E. Volatility Index rose 20 percent, reflecting investor uncertainty.
“Yesterday was a little overdone but investors need to be ready that volatility is going to be here for a while,” said Ron Florance, deputy chief investment officer at Wells Fargo Private Bank in Scottsdale, Ariz.
“We have this struggle between the short-term news and the longer term trends and that is always a recipe for volatility until the market can really find direction,” he said.
Benchmark crude in the United States hit its highest price in more than two years on concerns that foreign military action in Syria may further destabilize the Middle East.
The S. P. energy index rose 1.8 percent to lead the top 10 S. P. sectors. Chevron rose 2.5 percent, and Exxon Mobil gained 2.4 percent, both pushing the S. P. 500 and Dow industrial average higher.
In contrast, the concerns over higher oil prices dented airline stocks, with the N.Y.S.E. Arca airline index off 0.5 percent after stumbling 3.9 percent in the prior session.
European stocks were down for a third day, as concerns about a reduction in bond buying by the Federal Reserve and a political crisis in Italy added to the concerns over Syria.
Investors are worried about rapidly rising energy costs as a result of the impending conflict and their effect on consumers, and that progress in efforts to rein in the United States deficit may begin to reverse, said Richard Meckler, president of investment firm LibertyView Capital Management in Jersey City.
“The market has reset to a lower level to reflect that,” Mr. Meckler said. Investors expect a “contained” strike on Syria, he said, “but only the actual action and reaction will determine that. The biggest fear here is a much wider conflict.”
By the market close,United States crude was at $109.38 a barrel.
Gold, trading at $1420.60 an ounce, briefly rose to a three-and-a-half-month high, above $1,430 an ounce, as the Syria tensions raised its appeal.
In Europe, the FTSEurofirst 300 index of blue chip shares closed down 0.28 percent on Wednesday. The euro fell 0.3 percent against the dollar, to $1.3353. Asian shares also felt the effect of the developments in Syria, with markets lower throughout the region at the end of trading.
Article source: http://www.nytimes.com/2013/08/29/business/daily-stock-market-activity.html?partner=rss&emc=rss