Oil prices, as smooth as they were on Monday, continued to be a presence in the stock market Monday.
In fact, Monday’s action was similar to Friday, where a flattish trade in crude throughout the day continued to ease fears about economic impacts from whatever is taking place – or is going to take place – in the Middle East.
And unsurprisingly, eased fears means higher asset prices.
The Dow Jones Industrial Average gained 96 points to 12,226, while the S&P 500 Index rose 7 points to 1327 points.
Oil prices fell 0.9% to just under $97 on talk that Saudi Arabia would work toward filling any oil supply gap that came from the unrest in Libya.
So, now it’s just like that selloff week never happened, right? Well, stocks still have another 1% or so — which could be one good day on Tuesday — to hit another two-and-a-half year high. That had become such a regular occurrence it now seems incredible that stocks are still working back to a peak that was set Feb. 18.
And tech stocks, which had led the bounceback in stocks late last week, actually have a little more work to do. The Nasdaq finished just a point higher to 2782, as chip stocks gave back a little of their rally from Thursday and Friday. The Semiconductor HOLDRs (NYSE:SMH) exchange-traded fund was off 0.6% to $35.78.
The Nasdaq closed on Feb. 18 at 2834.
The moderation in tech, combined with the underperformance of the small-cap Russell 2000 Index, which rose only 0.2%, seems to suggest that the rebound in stocks is taking on more of a oversold-clearing flavor than one of flat-out speculation.
Of course, tell that to fans of silver, which climbed 2.5% to $33.80 an ounce, and is within 50 cents of another 31-year-high.
As the S&P 500 and Nasdaq end a sixth straight month of posting gains, it would not be a complete shock if stocks begin the month trading within a tight range leading into another important Friday jobs report — assuming, of course, a continued nonevent in oil prices (which could be pressing our luck).
On the other hand, the first day of the month has historically been a good one for bulls, and if a quick start brings into view the highs of last week, it could be off to the races again.