POSTED: 04:32 a.m. HST, Aug 28, 2013
LAST UPDATED: 04:32 a.m. HST, Aug 28, 2013
NEW YORK >> Stocks edged higher in early trading Wednesday as investors continued to focus on the possibility of a U.S.-led military intervention in Syria.
The Dow Jones industrial average was up 22 points, or 0.2 percent, to 14,797 after the first half-hour of trading. The Standard & Poor's 500 index rose a point, or 0.1 percent, to 1,631 and the Nasdaq composite rose 9 points, or 0.3 percent, to 3,588.
The escalating tensions between the U.S. and Syria hit the stock market hard on Tuesday, sending the Dow down 170 points. Gold is at a three-month high and crude oil is the highest it's been in a year and a half.
The quick rise in the price of crude oil is worrying investors because it almost always translates into higher fuel costs for businesses and consumers. While Syria has little oil, a regional conflict in the Middle East could led to supply disruptions in an area where half the world's proven oil reserves lie.
Oil rose 83 cents, or 0.8 percent, to $109.86 a barrel in early trading. It went as high as $112 a barrel overnight.
While the selling in stocks appears to have abated for now, the overall trend for the market has been down over the last couple of weeks. The S&P 500 has lost 4.6 percent since reaching an all-time high on Aug. 2, while the Dow is down 5.6 percent. Fund managers said investors will have little reason to enter the market until next week's employment report or until the Federal Reserve holds its mid-September policy meeting.
Before Syria grabbed the headlines, the focus had been on the Federal Reserve and whether the central bank was going to start pulling back on its massive bond-buying program, which has kept interest rates extremely low.
If oil prices remain at these elevated levels, the Fed may have to delay pulling back on its bond purchases, said Quincy Krosby, market strategist with Prudential Financial.
"The Fed would see higher oil prices, particularly if they linger at these higher levels, as a definite hindrance to employment and consumer spending," Krosby said.
In corporate news:
— Zales jumped $1.92, or 21 percent, to $10.88 after the jewelry store chain reported full-year income of 24 cents per share, well ahead of the 17 cents per share analysts expected.
— Avago, an electronics maker, rose $2.02, or 5 percent, to $38.52. The company reported earnings of 74 cents a share for its third fiscal quarter, beating the 68 cents per share analysts expected.