Shares Regain Ground as Oil Prices Decline

Stocks stabilized on Monday after Friday’s sharp sell-off as a drop in oil prices soothed Wall Street’s nerves.

Some hard-hit technology shares attracted buyers. Google jumped $28.04, or 7%, to $427.50 after tumbling $36.98 on Friday.

Despite oil’s pullback, investors remained avid buyers of many energy shares, which helped boost the market overall.

Trading opened with little excitement, almost as if Friday’s steep decline hadn’t happened.

The Dow, which had plunged 213.32 points, or 2%, on Friday -- its biggest one-day percentage decline since May 2003 -- opened with a slight gain and then traded in a narrow range for most of the session. It finished at 10,688.77, up 21.38 points, or 0.2%.

Most broader indexes also were modestly higher.

The Standard & Poor’s 500 added 2.33 points, or 0.2%, to 1,263.82. The technology-heavy Nasdaq composite, which plunged 2.4% on Friday, inched up 0.77 point to 2,248.47.

Winners topped losers by about 7 to 4 on the New York Stock Exchange and by about 5 to 4 on Nasdaq.

The market had been riled on Friday by another leap in oil prices amid growing concern about potential supply interruptions from key suppliers, including Nigeria and Iran.

Disappointing fourth-quarter earnings reports from blue-chip companies including General Electric and Citigroup also weighed on investor sentiment, raising questions about the economy’s health.

In their last trading day before expiring, crude oil futures for February delivery jumped $1.52 to $68.35 a barrel on Friday, the highest closing price since Sept. 1. The record closing high was $69.81 on Aug. 30, in the aftermath of Hurricane Katrina.

On Monday, the March crude oil contract, now the nearest-term contract, rose above $69 early in the session but fell back to close at $68.10, down 38 cents.

“The fact that we didn’t have oil follow through [on Friday’s surge] allayed some people’s concerns,” said John Caldwell, strategist at McDonald Financial Group in Cleveland.

There was other good news from the energy markets: Natural gas futures in New York slid 71 cents to $8.57 per million British thermal units, a five-month low, as relatively warm temperatures in the East further reduced the risk that the U.S. would face a gas-supply crunch this winter.

The futures-market price of gas has fallen 44% since mid-December, although it still is 34% above its level one year ago.

Despite concerns about the effect of $68 oil on the economy, Caldwell said, “We’ve been here before” -- meaning in September -- without throwing the economy into a recession.

Worries about U.S. growth also were fanned on Friday by GE’s profit report, because the company is considered a microcosm of the economy. The results were less robust than some investors had hoped, in part because of weaker-than-expected sales. GE’s slide on Friday of $1.31 to $33.37 helped to pull down the Dow index. On Monday, GE slipped 8 cents to $33.29.

Still, GE Chairman Jeffrey Immelt on Friday said the company was entering the new year with “a strong outlook.”

The Conference Board on Monday said its index of leading economic indicators rose 0.1% in December, which was below analysts’ expectations but still pointed to growth.

Among Monday’s highlights:

* Ford Motor rebounded 42 cents to $8.32 after announcing a sweeping restructuring plan. Rival General Motors gained $1.80 to $21.85. Ford is up 7.8% this year; GM is up 12.5%. By contrast, the S&P; 500 is up 1.2%.

* Citigroup, which slumped $2.25 to $45.69 on Friday after missing analysts’ quarterly earnings expectations, rose 31 cents to $46. But Bank of America lost 23 cents to $43.96 after reporting its first profit decline in more than four years, in part because of consumer bankruptcies.

* Technology stocks, which had helped lead the market higher in the first two weeks of the year, were mixed. Some of the biggest tech names, including Intel, Microsoft and Cisco Systems, ended the day lower. Intel dropped 41 cents to a 52-week low of $21.35. Microsoft lost 6 cents to $26.35 and Cisco gave up 35 cents to $18.16.

Also, software firm McAfee rose 71 cents to $27.63 in regular trading, then slumped to $23.75 after hours. The company said fourth-quarter results would be below expectations.

But disk-drive maker Seagate Technology jumped 57 cents to $25.57 after losing 59 cents on Friday. Data storage device maker Sandisk soared $4.20 to $72.59. It fell $3.94 on Friday.

Despite Intel’s slide, 13 of 19 issues in the SOX chip-stock index rose for the day.

* Energy stocks continued to roar ahead, led by oilfield-services companies such as Schlumberger, which jumped $3.75 to a record $126. Other gainers included Chevron, up $1.09 to $62.21, and Valero Energy, up 85 cents to $61.17.

* The euro jumped to a four-month high against the dollar after the European Central Bank’s chief economist warned of rising inflation risks. His comments raised the possibility of more interest rate increases in Europe. The euro ended at $1.231 in New York, up from $1.213 on Friday.

* U.S. Treasury bond yields were little changed. The 10-year T-note ended at 4.36%, up from 4.35% on Friday.

* In foreign trading, most Asian markets were down sharply on the heels of Wall Street’s losses Friday. Japan’s Nikkei-225 index slid 2.1% and South Korea’s main index also fell 2.1.%

But European markets were little changed. The French market lost 0.5% and British stocks were down 0.2%.