Updated from 1:00 p.m. EDT
Stocks in New York were easing from their early highs Tuesday afternoon but were still gaining substantially after Hurricane Gustav failed to cause major oil-supply disruptions, sending crude prices much lower.
Dow Jones Industrial Average
, up as much as 230 points earlier, was recently up 1.9 points to 11,545, and the
was down 5.3 points to 1277. The
gave back 20 points to 2347.
Even as stocks in the financial and consumer-goods sectors were advancing as oil prices fell, minerals and oil-related companies were getting hit, causing the major indices to jerk closer to the baseline. While Dow members
Bank of America
were each jumping more than 4%,
were down 2.9% and 5.2%, respectively.
As stocks climbed, the price of crude oil was plummeting $6.30 to $109.16, after Gustav hit the Louisiana coast but largely spared New Orleans and energy-production facilities in the area. Gold was down $22.10 to $813.10.
"I think you're going to see a continuation of the selloff
in oil, which obviously is beneficial to equities in the short term," said Chris Johnson, CEO and chief investment strategist at Johnson Research. He said that on a technical basis, the next important price levels for crude are $100, then $90.
Johnson said that speculative money has largely left the oil trade. "This group ... went from being net long to net short in about a week or so," he said. "The speculators are the first ones out. Now everybody else is going to get out." He said that the decline in oil prices will benefit equities as money that had sat on the sideline or been in commodities will need to find another place to go.
As for corporate news, Internet company
said it will develop its own Web browser, called Chrome, in an effort to compete with
Elsewhere in technology,
appointed Ben Verwayyan, former head of
, as its new CEO. Alcatel-Lucent also selected Philippe Camus to be its nonexecutive chairman.
In another shakeup,
appointed Stephen Odell to head up its Volvo brand. Odell replaces Frederik Arp.
On the M&A front,
American business announced a deal that would give BP 25% interest in Chesapeake's Fayetteville Shale development for $1.9 billion.
were rising after Japanese company Shionogi said it would buy the drugmaker for $1.1 billion.
Korea Development Bank
executive confirmed the bank is holding discussions to buy a stake in struggling brokerage
, adding fuel to recent reports of a possible buyout.
Wachovia Capital Markets, on the other hand, issued a bearish forecast for investment banks Lehman,
. Wachovia cited seasonality, investor trepidation and declining valuations in equities as well as fixed-income markets as it reduced earnings estimates on the three brokerages.
Fellow financial-sector member
Bank of America
saw shares rise on a Goldman Sachs buy recommendation.
with its largest union over a new labor contract, raising the chances of a strike by the International Association of Machinists and Aerospace Workers.
Away from stocks, longer-dated U.S. Treasury securities were ticking upward. The 10-year note was up 12/32 to yield 3.77%, and the 30-year was climbing 20/32, yielding 4.39%. The dollar was rising sharply against the euro, yen and pound. The dollar index, which tracks the dollar against a basket of foreign currencies, was up 0.6% at 78.04.
Turning to the day's economic data, the U.S. Census Bureau's look at July construction spending showed a 0.6% decline for July, down from a 0.3% increase in June and a wider decline than the 0.4% economists were expecting. The Institute for Supply Management's August manufacturing index registered 49.9, vs. estimates for a read of 50.
Overseas, European indices were looking strong, as the FTSE in London and the Dax in Frankfurt posted gains. In Asia, Japan's Nikkei was dropping, while Hong Kong's Hang Seng was slightly higher.