Dow Rally As Crude Oil Gushes

Wall Street closed higher Monday on low volume as a rally in the commodities complex allowed the markets to bounce back from last week's disappointing performance. While Monday’s session saw solid gains for stocks, analysts said not to read too much into the move as it was marked by ridiculously low volume due to the holiday-shortened trading week. The markets are closed on Friday for the Fourth of July.

Wall Street rallied around solid gains in the commodity markets, where crude oil enjoyed its biggest one-day rally since early June. Boosted by a Nigerian militant attack, crude settled up $2.33 per barrel, or 3.37%, to $71.49.

With some of the gains attributable to end-of-the-quarter technical maneuvering by portfolio managers, analysts cautioned against seeing the upswing as a sign of conviction among investors that it was time to move into the market ahead of an economic bounce. Stocks seesawed in the early going but jumped after oil gained.

The Dow Jones industrial average rose 90.99, or 1.1 percent, to 8,529.38. The S&P 500 index rose 8.33, or 0.9 percent, to 927.23, while the Nasdaq composite index rose 5.84, or 0.3 percent, to 1,844.06. Stocks ended last week mixed.

The Dow is up 30.3 percent from a 12-year low on March 9, though it has fallen 3.1 percent from a five-month high on June 12. The blue chips are now down only 2.8 percent in 2009.

With the quarter's end coming up on Tuesday some money managers were buying stocks bolster their returns. The Standard & Poor's 500 index is up 16.2 percent since the start of the April-June quarter.

The solid gains on Wall Street come after the markets capped off their second-straight weekly loss with a mixed picture on Friday. The two-week slide, the Dow’s first since early March, shaved 4% off the blue chips’ three-month surge. In recent weeks, the bears have successfully argued that stocks have gotten ahead of the still-weak economy. Despite the recent struggles, it’s been a stellar second quarter for Wall Street as the Dow has jumped 11% and is on track for its biggest quarterly percentage gain since 2003. The Nasdaq Composite has surged more than 20%, putting it on pace to break a string of three-straight losing quarters.

The market is trying to digest the gains that have occurred over the past two or three months, which I think is a positive. We’re really not giving back much of them.

Due in part to these huge gains, market strategists expect to see some window-dressing at the end of the quarter as portfolio managers look to scoop up some of the quarter's strongest performers.

All financial markets are closed Friday for the Independence Day holiday weekend. Ahead of that, a slew of economic reports are due, including readings on housing, manufacturing and the labor market. Stocks are likely to be volatile this week due to the confluence of the holiday, the heavy spate of economic news and the quarter end.

However, stocks could benefit Monday and Tuesday from some end-of-quarter machinations as market pros look to "window dress" their portfolios before closing the books. Generally, that impact is positive as money managers look to add the quarter's big winners to their portfolios.

GUSHING OIL AND COMMODITY PRICE JUMP BOOST STOCKS
Rising oil prices boosted Dow oil components Chevron and Exxon Mobil. Other big gainers included Boeing, United Technologies, Microsoft, Hewlett-Packard and Intel paced technology gains.

A jump in oil sent investors rushing to put money into the stock market in the final days of the second quarter. Energy, industrial and materials stocks pulled the market higher in light trading Monday as investors raced to keep up with the gains in oil.
Crude rose $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange after China said it would boost oil reserves and Nigerian militants partly shut down an offshore oil platform.