Wall Street buoyed by oil sector

Tuesday June 30, 2009

NEW YORK: US stocks rose on Monday as higher oil prices lifted shares of energy companies and fund managers snapped up this quarter's winners to burnish their portfolios.

Energy shares were a strong performer in the quarter, and a 3.4 percent jump in the price of oil lifted them even further on Monday. Exxon Mobil Corp was the Dow's top driver, rising 2.2 percent to $70.58.

Fund managers are building up their portfolios before the quarter ends on Tuesday in a ritual known as "window dressing" by selling some of the quarter's losers and scooping up the winners. This move bolstered stocks as well.

"This has been a heck of a run," said Marc Pado, US market strategist at Cantor Fitzgerald & Co, in San Francisco. "A lot of people didn't believe and left a lot at the table. Having the right positions (and) not showing a great deal of cash, that is really the main driving force here -- the so-called window dressing.

"You can show you own the names that everyone knows did well," he said.

Financials, the day's top advancer, also led quarterly gains, followed by technology.

The S&P 500 is up 16.2 percent so far for the quarter, putting it on track for its best quarter since the fourth quarter of 1998, when the index jumped nearly 21 percent.

The Dow Jones industrial average gained 90.99 points, or 1.08 percent, to end at 8,529.38. The Standard & Poor's 500 Index was up 8.33 points, or 0.91 percent, at 927.23. The Nasdaq Composite Index was up 5.84 points, or 0.32 percent, at 1,844.06.

Shares of home builders also helped underpin the market after Credit Suisse raised its rating on KB Home, citing stronger orders and more attractive valuation. KB Home was up 5.1 percent at $14.11. The Dow Jones US Home Construction Index advanced 1.5 percent.

Wall Street's eyes and ears also were on the news coverage of Bernie Madoff, who was sentenced to 150 years in prison on Monday for running what prosecutors called a $65 billion Ponzi scheme. When Madoff's fraud was revealed last December, its scope was so brazen and so massive that it shocked investors and made everyone question their broker.

Signs of life in overseas markets helped to build optimism about the prospects for an economic recovery.

Shanghai stocks reached a one-year closing high for the fourth straight session as signs of a Chinese economic recovery and ample liquidity boosted the market, bolstering investor sentiment.

Crude oil futures jumped $2.33 to settle at $71.49 per barrel after Nigerian militants said they attacked the country's oil facilities, which set off some concerns about supply.

An S&P energy index was up 1.3 percent, while Occidental Petroleum jumped 2.9 percent to $66.13.

On the Nasdaq, Microsoft Corp advanced 2.2 percent to $23.86 after Deutsche Bank raised its price target on the stock to $30 from $22.


(Reuters)