Stocks Finish Lower as Oil Tops $113 a Barrel

NEW YORK (TheStreet) -- Stocks finished in the red Friday as oil topped $113 a barrel and a government shutdown loomed.

The Dow Jones Industrial Average shed 29 points, or 0.2%, to close at 12,380, after dropping to as low as 12,321 earlier in the session. The S&P 500 gave back 5 points or 0.4% at 1328, and the Nasdaq Composite slid 15 points, or 0.5%, to 2780.

For the week, the Dow edged up 4 points, or 0.03%. The S&P 500 lost 4 points, or 0.3%, while the Nasdaq lost 9 points, or 0.3%.

Stocks traded mostly in the negative territory on Friday , with rising oil prices boosting energy and commodity-related stocks, while punishing auto, retail and consumer staples sectors.

Merck(MRK), Pfizer(PFE) and Chevron(CVX) were among the nine Dow components that finished the day in the green.

Cisco(CSCO), Alcoa(AA) and Boeing(BA) dragged the Dow lower on Friday.

"For a long time the market was not affected by rising oil prices because the economy was improving," said Kate Warne, investment strategist for Edward Jones. "Now oil prices have moved by enough that investors are beginning to worry about how it will impact demand."

Oil prices were trading at levels not seen since September 2008 with the May crude oil contract gaining $2.49 to settle at $112.79 a barrel.

Meanwhile, other commodities also gained on a weaker dollar. Gold prices hit new highs, with the June gold contract gaining $14.80 to settle at $1,474.10 an ounce. Silver prices were trading near 31-year highs, with the May contract adding $1.05 to settle at $40.62 an ounce.

The government appeared set for a shutdown Friday at midnight as talks over the budget continued to stall.

The market has largely shrugged off concerns about a government shutdown in the past. Warne notes that in the last 17 times the government has shut down, the market has shed an average of only nine-tenths of a percent.

Still a prolonged shutdown could have some impact on companies dependent on government contracts. Economic reports are also likely to be delayed.

Warne, however, expects investors to stay focused on the earnings season, which she expects to be solid.

"Economic reports are backward-looking and so are earnings reports, but investors will be listening in to management commentary during earnings conference calls which will be forward-looking," said Warne of Edward Jones.