Stocks close higher on commodities rally
Following a strong show on Friday, the Dow rose 45 points, led by oil and precious metals
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Stocks closed modestly higher as oil and precious metals staged a strong comeback, sending prices in the energy and materials sectors higher.
The Dow Jones Industrial Average rose 45.94 points, or 0.4 percent, to close at 12,684.68, after a better-than-expected April jobs report helped stocks bounce back on Friday following four days of losses.
The S&P 500 rose 6.09 points, or 0.45 percent, to close at 1,346.29, while the Nasdaq rose 15.69 points, or 0.6 percent, to close at 2,843.25. The CBOE Volatility Index, widely considered the best gauge of fear in the market, sank to nearly 17.
Among key S&P 500 sectors, energy and materials gained, while financials fell.
News before the market opened that Standard & Poor's was downgrading Greece to near-junk status sent the dollar higher, and pressured stocks. But that sentiment reversed around mid-morning, and the dollar traded lower against a basket of currencies by afternoon.
Commodities strengthened because "geopolitical concerns are still very much in place," Cardillo said. "There’s no signs of the global economy weakening where we’d see demand slack off..and so I think the fact precious metals had gotten ahead of themselves, and wound up in more speculative hands, is basically what caused the reversal."
Gasoline futures also skyrocketed, rising more than 6 percent, as investors fear flooding could have an impact on supplies.
More than 90 percent of all energy stocks gained as oil recovered, including shares of Baker Hughes, which also benefited from an upgrade by Barclays to "overweight" from "equal weight." Diamond Offshore advanced after Duncan-Williams raised the firm to "buy."
Precious metals also bounced up, with silver gaining 5.2 percent on Monday to close at $37.11 an ounce, while gold closed up about 0.8 percent to 1 percent.