Stocks Hold On As Oil Rises

Stocks gave up a moderate early advance to close barely changed Monday afternoon after oil prices rebounded from their recent decline.
Investors also moved to the sidelines to wait for Wednesday’s Federal Reserve meeting on interest rate policy. Wall Street had been flirting with 2006 highs, but the market remains anxious about the possibility the Fed could raise its benchmark short-term rate, which is now at 5.25 percent.
The energy and materials sectors were the afternoon’s winners.
The day’s economic news was cheerless. The Commerce Department said America’s deficit in the broadest measure of foreign trade increased in the spring to the second highest level in history, reflecting a big jump in payments for foreign oil. The current account deficit rose to $218.4 billion in the April-June quarter, an increase of 2.4 percent over the deficit the first three months of the year.
“The market is looking ahead to slower economic growth, but not necessarily negative growth,” said Peter Cardillo, chief strategist, senior vice president and market analyst, S.W. Bach & Co.
Bonds fell, with the yield on the 10-year Treasury note at 4.81 percent, up from 4.79 percent Friday. The U.S. dollar was mostly higher against other major currencies. Gold prices rose.
A barrel of light crude settled at $63.80, up 47 cents on the New York Mercantile Exchange after earlier rising more than $1.