WALL Street rose yesterday as energy shares rallied on higher oil prices as the United States and its allies edged closer to military action against Syria.
Trading volume was thin and came after a drop in the S&P 500 index on Tuesday to its lowest in two months. Yesterday stocks recouped some of the losses as traders bought energy stocks, which rose on a spike in oil prices as markets feared supply interruptions from the Middle East.
Energy shares rose 1.8 per cent, by far the biggest gainer among S&P 500 sectors. Chevron gained 2.5 per cent to $121.81 while Exxon Mobil was up 2.3 per cent to $88.84. The two provided the biggest lifts to the Dow industrials and the S&P 500.
Brent crude gained 1.4 per cent while US crude futures rose 0.4 per cent and are up 5.3 per cent over the past five sessions as investors fret any military action could create supply problems. During the session, oil hit its highest since May 2011.
“If you want a hedge against Middle East uncertainty, energy shares will serve you well,” said Jim McDonald, chief investment strategist at Northern Trust Global Investments. At the UN Security Council, Britain sought authorisation for military action for an alleged poison gas attack against Syrian civilians by President Bashar al-Assad’s government. US officials described plans for multinational strikes that could last for days.
The CBOE Volatility Index, a measure of investor anxiety, fell 2.4 per cent, though it remains up more than 17 per cent on the week.
The Dow Jones industrial average was up 48.38 points, or 0.33 per cent, at 14,824.51. The Standard & Poor’s 500 Index was up 4.48 points, or 0.27 per cent, at 1,634.96. The Nasdaq Composite Index was up 14.83 points, or 0.41 per cent, at 3,593.35.