THE FALLOUT FROM events in Japan pushed stock market prices higher but the price of oil lower as the world’s economies reacted to news of the massive earthquake and tsunami that has so far killed hundreds.
The prospect of falling oil demand from Japan, the world’s third-largest oil consumer, sent crude prices down sharply, as did the failure of anticipated protests in Saudi Arabia to draw large crowds. Crude oil fell 1.3 percent to $101.30 (€73) a barrel.
The Dow Jones industrial average rose by 0.2 per cent to 12,006 in afternoon trading.
The Standard & Poor’s (S&P) 500 rose by 0.4 per cent to 1,300. Energy companies, which drove stocks lower on Thursday, rose 1.3 per cent to lead the 10 company groups that make up the S&P index.
Companies that benefit from global infrastructure expansion did well as investors anticipated that Japan would be in need of widespread rebuilding. AK Steel Holding Corp. rose 5 per cent. Goodyear Tire and Rubber Co. rose 6 per cent.
The Nasdaq composite gained 7, or 0.3 per cent, to 2,707.
Despite Fridays’ gains, each index is on track to end the week lower than where it started. The Dow is down 1.3 per cent for the week, while the broader S&P index is down 1.6 per cent.
In addition to the earthquake, another factor pushing oil prices lower was relief that a day of protests in Saudi Arabia only drew a few hundred people, and none in the capital.
Oil traders have been worried the violence in the middle east and North Africa would spread to the world’s number one oil exporter.
“The market is going to be see-sawing back and forth” until the long-term effects of the unrest in the Middle East and the disaster in Japan become clear, said Anthony Chan, chief economist for J.P. Morgan Wealth Management.
The US Commerce Department reported that retail sales rose 1 per cent in February, the biggest gain in four months and more than the 0.8 per cent analysts had expected.
Shoppers laid out more cash for cars, clothing and gadgets in February, leading to an eighth month of gains.
Stocks fell sharply Thursday on weak economic news from China, the US and Spain combined with a slump in oil company shares. The Dow Jones industrial average had its biggest drop since 11 August.
Other than several large swings in the past month, stocks have been climbing steadily since September.
“It could be time for a well-deserved rest,” said Ryan Detrick, senior technical strategist for Schaeffer’s Investment Research. “The markets had a spectacular six-month rally and now they’re showing some slight cracks.”
The quake caused a selloff in global stock markets, led by sharp drops in insurance companies. Japan’s Nikkei closed down 1.7 per cent. The yen remained stable, however, because it is seen as a relatively safe investment for international traders.
The yield on the 10-year US treasury note rose to 3.40 percent from 3.37 percent late Thursday.