Stocks Snap Losing Streak as Oil Prices Stabilize [Video]

Stocks snapped a three-day losing streak Friday to close broadly higher, helped by stabilizing oil prices and some end-of-the-month bargain hunting.

Global equity markets sold of sharply this week as violence in Libya, Africa's third-largest oil producer and a member of OPEC, caused oil prices to hit levels not seen in more than two-and-a-half years.

The Dow Jones Industrial Average ($INDU) rose 62 points, or 0.5%, to close at 12,130. Prior to Friday's session the blue-chip index lost more than 300 points in three days. It finished the holiday-shortened week down 2.1%.

The broader S&P 500 ($INX) closed Friday up 14 points, or 1.1%, at 1,320. The tech-heavy Nasdaq Composite ($COMPX) added 43 points, or 1.6%, to finish at 2,781. For the week, the S&P 500 and Nasdaq lost 1.7% and 1.9%, respectively.

Stocks suffered their worst week of the year after crude oil futures spiked nearly 14% on concern that civil war in Libya could disrupt supply or even spill over into Algeria, Bahrain and Saudi Arabia. Benchmark crude oil traded on the Comex division of the New York Mercantile Exchange briefly crossed $100 a barrel this week but by Friday the rally lost steam, as the April contract rose 60 cents, or 0.6%, to settle at $97.88 a barrel.

Economic news was mixed, as a surprise downward revision to fourth-quarter GDP was offset by consumer sentiment hitting a three-year high.

Friday's action was likely dictated by technically oversold conditions heading into the last trading day of the month on Monday, says Alan Valdez, director of trading operations at DME Securities. Beyond that the market remains wary of what higher oil prices could mean for consumer spending and the pace of economic growth, the veteran New York Stock Exchange (NYX) trader says.

"You see program trading taking the market back up today on light volume, but remember: Every penny that oil goes up at the gasoline pump, it's $400 million out of consumer spending," says Valdez. "That's $400 million not going to Walmart (WMT) or 7-Eleven. It's a huge drag on the economy."

Speaking of Walmart, Valdez says the retailer's disappointing fourth-quarter report earlier this week and Friday's downward revision to GDP suggest that consumers aren't spending as much as Wall Street had hoped -- regardless of what the consumer sentiment survey showed.

"For traders, the real survey of consumer sentiment is Walmart," he says. "About 150 million people a week shop at Walmart. And their sales were a little light their, and guidance was a little light."

For more on Valdez's view from the floor of the NYSE, see the video above.


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17 Comments

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lisak1960

I'm glad we don't get as much government as we pay for. I can't stand any more government help. They took my best employee by raising my taxes and offering her more money to do less. America, wake up. Our government is too big and getting bigger and more oppressive.

February 26 2011 at 4:21 AM Report abuse +2 rate up rate down Reply
Robert & Lisa

Our socialist public educational system has indoctrinated our children into believing capitalism and freedom is bad and socialism is good. If Socialism is so good, why does the long time socialist government of Mexico boast of being the #1 producer of silver, plenty of oil, and the richest man in the world, yet 99% of their people are in the poverty level making an average of less than 6 dollars a day. Corruption is rampant. The evil, ultra rich see Mexico and want to implement socialism here, where they can have all of the wealth and power and the middle class will now be among the poor. That is what their Demoncrat puppets in the white house and senate are doing to us.

February 26 2011 at 3:13 AM Report abuse +5 rate up rate down Reply
Franco

I thought that I was going to be posting next to sane reasonable men.

February 26 2011 at 12:08 AM Report abuse +1 rate up rate down Reply
abcdferris

stsbilizing, who writes this stuff?

February 25 2011 at 11:26 PM Report abuse +2 rate up rate down Reply
MSmailbox

It wasn't only oil prices, that were in the news. There were several key developments, within the US, which point to improved business conditions, within our country. The Boeing announcement and the easing of labor pressures are very encouraging. I was selling telephone and a net buyer of semiconductors, computing equipment and regional banking. I'm about 40% margined, at present. The near-term looks good, the mid-term sags mildly and the long-term outlook for equities is good, as always. Pick the best from each sector and keep an ear to the ground. America may just be coming back to her senses. I look for oil to fall, very shortly and gold is being stubbornly overbought, but I anticipate a correction, once people realize that the world isn't coming to an end, any time soon. Make no mistake about it, the world will end, the nations will be judged (could be happening, now), but in that case, I'm not confident that gold will do you any good, anyway. LOL!

February 25 2011 at 10:14 PM Report abuse rate up rate down Reply
midsr4kids

All of you have no trust in our mixed race overlord Obama from Kenya... he said oil would stabilize and Soros did it for us! Viva la reveloution!

February 25 2011 at 7:52 PM Report abuse -2 rate up rate down Reply
2 replies to midsr4kids's comment
MSmailbox

President Obama isn't a Soros-puppet. Soros is an unrepentant man, who is heading for destruction. I give our President far more credit than to be a pawn of a money-monger, such as Soros. If he truns his ship around, Soros could do much good, in our world. He'll need to ditch the bitterness, come into the 21st. Century and accept Christ, as his Lord and Savior... Laugh if you want to, but miracles are happening and will continue to happen, right up until the end. That applies to us in our personal lives, which are like a vapor, and to our world, which will end, when the last of the "elect" acknowlege Jesus Christ. Note that President Obama has bravely acknowleged Christianity! Is there any more powerful sign that America has hope? I don't know what it is, if men of power seek God, humbly. We are all in God's care, so do NOT let the news shake you. It is God who holds your life, even as the bomb shells, explode all around us. I am so thankful for His provision and giving me a place to live and work. I have 1/20 the amount of money that I had 2 years ago, but I am more happy and hopeful (especially for our youth), tahn I've ever been in my entire lifetime. Listen, miracles are happening... "Be still, and know that I am God." Now, that's better than money in the bank. LOL! God bless you, especially in matters of love and life. He'll provide the rest, in good time. Take care. Mike

February 25 2011 at 10:27 PM Report abuse rate up rate down Reply
torandersen

it's time American's stand up to wall street, these hogs rip through everyone's paychecks before it even gets a chance to trickle down to where it needs to go, it's time to tell them to wait their F turn, and if they don't get it boycott them until they do!!

February 25 2011 at 7:45 PM Report abuse +1 rate up rate down Reply
Robert & Lisa

Our socialist public educational system has indoctrinated our children into believing capitalism and freedom is bad and socialism is good. If Socialism is so good, why does the long time socialist government of Mexico boast of being the #1 producer of silver, plenty of oil, and the richest man in the world, yet 99% of their people are in the poverty level making an average of less than 6 dollars a day. Corruption is rampant. The evil, ultra rich see Mexico and want to implement socialism here, where they can have all of the wealth and power and the middle class will now be among the poor. That is what their Demoncrat puppets in the white house and senate are doing to us.

February 25 2011 at 5:50 PM Report abuse +7 rate up rate down Reply
crrunch

It's not a stock market anymore - it's one huge commodities market.....bummer

February 25 2011 at 5:32 PM Report abuse +4 rate up rate down Reply
rcalley1

All you speculators who have purchased barrels of crude need to start to sell them now. The price is going down way down. We will drill in the USA and off shore without restriction by June of this year. Just the act of lifting the restrictions will drop the price per barrel by 50% over night.
I hope you don't believe me you parasites need to loose a bundle of money!

February 25 2011 at 4:35 PM Report abuse rate up rate down Reply