Wall Street buoyed as materials gain ground

Dow Jones:12,086.02 (+67.39) S&P 500:1,297.54 (+3.77) Nasdaq:2,698.30 (+14.43)

US STOCKS advanced yesterday as materials shares rose, but rising commodities prices due to turmoil in the Middle East and North Africa could keep rallies modest.

The S&P index of materials stocks rose 1.4 per cent and was the SP 500’s top performing sector.

The sector climbed in sync with metals prices, including copper, which was up more than 2 per cent.

Brent crude settled at $115.55 a barrel and US crude gained 78 cents to settle at $105.75, the highest close since September 2008, as further unrest in Yemen added to risks of oil supply disruptions in the region.

“These rising commodity costs could be with us for some time – that creates a headwind for growth,” said Karl Mills, president of Jurika, Mills Keifer Investment Partners, in Oakland, California.

While higher oil prices would benefit energy companies, they would have a dampening effect on economic growth over a longer time horizon.

The Dow Jones industrial average gained 67.39 points, or 0.56 per cent, to 12,086.02.

The Standard & Poor’s 500 Index rose 3.77 points, or 0.29 per cent, to 1,297.54.

The Nasdaq Composite Index climbed 14.43 points, or 0.54 per cent, to 2,698.30.

Freeport-McMoRan Copper Gold shares jumped 5 per cent to $54.88 after chief executive Richard Adkerson, speaking at a Reuters summit in New York, said the company has the balance sheet to handle a large acquisition.

As for the outlook for energy demand and costs, Mr Mills said: “Japan now has to replace 10 per cent of its electricity production, probably through natural gas and oil. Some of it will come from the Middle East, which is going through its own trouble right now.

“That probably gives energy pricing more of a floor where it is,” he said.

Refiner Valero Energy gained 2.6 per cent to $28.83. Shares of Exxon Mobil up 0.05 per cent at $82.60 have gained 13 per cent since the start of the year.

Money manager Van Eck Global resumed creating new shares of its Market Vectors Egypt Index ETF after the local Egyptian market reopened. The fund was down 8.1 per cent at $15.30.

– (Reuters)