Stocks Close Mixed Despite Big Drop in Oil

The bulls shrugged off a massive drop in the price of oil to push stocks to a mixed close Monday. Technology shares, indicated by the Nasdaq Composite, closed lower.

Today’s Markets

At the 4 p.m. close in New York, the Dow Jones Industrial Average rose 44.13 points, or 0.53%, to 8324.87, the Standard & Poor's 500 gained 2.28 points, or 0.25%, to 898.70 and the Nasdaq Composite sank 9.12 points, or 0.51%, to 1787.40. The consumer-friendly FOX 50 gained 1.59 points, or 0.24%, to 668.35.

Stocks came way off of their lows by afternoon trading, rising from a 90-point drop at today’s open. However, volume was abnormally light, with less than 900 million shares trading hands.

With little company or economic news to go on and Wall Street coming off a long holiday weekend, Monday’s session was defined primarily by a broad selloff in the commodities complex.

Oil futures retreated by $2.68 a barrel, or slightly more than 4%, to $64.05 in New York-based trading. Crude had recently been as high as the low $70s last month. The metals markets were somewhat quieter, with gold trading lower by $6.70 to $924.00 a troy ounce and industrial copper futures falling by 1.8%.

Oil was led lower primarily by gains in the U.S. Dollar, which were up about 0.5% against the Euro and British Pound, and the negative June jobs report coming out of the Labor Department on Thursday, which gave traders concern an economic recovery was still heavily in question.

"Although unemployment numbers are a lagging indicator it certainly was a reminder that the US & European economies are still a ways away from recovery mode," said Dominick Chirichella with the Energy Management Institute

Oil and copper’s drop dragged down three energy and material components of the Dow: Exxon Mobil (XOM), Chevron (CVX) and Alcoa (AA). Other material names lower this morning included U.S. Steel (X), copper mining giant Freeport McMoRan (FCX) and ConocoPhillips (COP).

"Right now, where oil goes so goes the rest of the market," Jud Pyle with Peak6 Investments told FOX Business. "It's a gauge of broader sentiment on where this economy is headed."

Those loses were offset by a rise in the consumer staple stocks such as Proctor & Gamble (PG), Kraft Foods (KFT), and others.

For today’s economic agenda, the only report out today is the Institute for Supply Management's service sector index, which came in slightly better than expected.

The ISM non-manufacturing index for June was at a reading of 47.0, a point above the 46.0 expected by economists. A reading below 50 indicates the service sector is contracting.

The new orders index, a sign of future economic activity, rose to a reading of 48.6 compared to a May reading of 44.4.

Company News

A bankruptcy judge ruled that General Motors can sell its assets to a new company, a key step for the reemergence of GM from Chapter 11 bankruptcy.

EMC Corp. (EMC) raised its offer for online storage company Data Domain (DDUP) to $2.2 billion, or $33.50 a share. EMC has been in a bidding war for Data Domain with its primary competitor NetApps (NTAP).

Global Markets

In London, the FTSE 100 index fell 0.98% to 4184.91 while Paris' CAC 40 traded down 1.2% to 3082.16 and Germany's DAX fell 1.2% to 4651.82.

In Asia, Japan's Nikkei 225 closed lower by 1.38% to 9680.87 while Hong Kong's Hang Seng fell 1.23% to 17979.41. China's Shanghai Composite rose 1.18% to 3124.67.

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