COMMODITIES : Oil Futures Rise; Stock Indexes Lower
A rise in oil prices helped trim losses in stock index futures, which moved steadily lower early Wednesday because of the release of a barrage of anti-inflationary news from the federal government.
On other markets, livestock and pork futures were mixed, wheat futures were mostly higher and soybean and corn futures were lower.
Oil opened under pressure Wednesday, but rose late in the day, surging 58 cents during one early afternoon stretch to the day’s high of $16.96 a barrel after Saudi Arabia endorsed a meeting of OPEC’s price committee, which was finally scheduled for April.
“When anyone else says that, the market takes it with a grain of salt,” said Bob Murphy, analyst with E. F. Hutton & Co., New York. “But when the Saudis do it, especially since they’ve been making noises recently about discounting their own product, the impact was almost immediate.
“You could almost feel the psychology changing.”
West Texas Intermediate crude settled 38 cents to 49 cents higher, with the May contract for delivery at $16.86 a barrel; heating oil was 1.32 cents to 1.54 cents higher, with April at 47.73 cents a gallon, and unleaded gasoline was .93 cent to 1.30 cents higher, with April at 47.25 cents a gallon.
The precious metals opened higher Wednesday, but floundered after the government released a pair of new economic reports--a modest 0.2% rise in consumer prices last month and a revised 4.8% economic growth rate in the last quarter of last year.
“Once inflation concerns stabilized, everything stagnated,” said Bette Raptopolous, analyst with Prudential-Bache Securities in New York.
Gold Higher
Gold settled $2.40 to $3.30 higher on the New York Commodity Exchange, with March at $451.10 an ounce; silver climbed 14.5 cents to 15.6 cents, with March at $6.61 an ounce. Platinum advanced for the third straight day, settling $3.10 to $3.40 higher, with March at $513.50 an ounce.
Stock index futures settled .25 point lower on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poors 500 index settled at 270.40.
The underlying spot index climbed 0.07 point, closing at 268.91.
“We broke down to Tuesday’s lows early in the day, but the fact that we didn’t break them might have been one signal of strength,” said John Mitchell, a broker with Elders Futures Inc. of Chicago.
“Then, the oil news touched off a rally in interest-rate futures and we moved up alongside,” he said.
Wheat futures prices climbed on the Chicago Board of Trade on news the Soviet Union would take delivery of 500,000 metric tons of wheat under the government’s export bonus program, as well as an offer extended to Poland under the same program.
But the bullish news was tempered when C&D; Commodities, the major player in the grains pits the two previous days, sold off its wheat supplies.
Wheat settled 0.25 cent lower to 1 cent higher, with the contract for May delivery at $3.0725 a bushel; corn was unchanged to 1.50 cents lower, with May at $2.0625 a bushel; oats were 0.50 cent to 2.25 cents lower, with May at $1.6775 a bushel, and soybeans were 3.25 cents to 5 cents lower, with May at $6.3975 a bushel.
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