Energy sector pulls up US stocks at Wall Street

Chevron and Exxon Mobil led the pack of Dow gainers

Stocks at wall Street ended with moderate gains on Wednesday, 28 August 2013. U.S. stocks on Wednesday advanced for the first session this week, with oil producers leading the gains as the price of crude settled at a more-than-two-year high above $110 a barrel. Oil costs escalated on the view that military action against Syria could be coming.

The Dow Jones Industrial Average rose 48.38 points, or 0.3%, at 14,824.51. The S&P 500 index gained 4.48 points, or 0.3%, to 1,634.96, with energy leading gains among its 10 major sectors. The Nasdaq Composite rose 14.83 points, or 0.4%, to 3,593.34.

Chevron and Exxon Mobil led the pack of Dow gainers. Eight of ten sectors finished in positive territory with energy leading the way.

As the U.S. appears poised to take military action against Syria after its government regime used chemical weapons against its citizens, the market place is extra nervous. Such has recently favored safe-haven assets such as gold and U.S. Treasuries.

Crude prices ended substantially higher on Wednesday, 29 August 2013. Tensions over Syria continued to feed supply concerns in the Middle East on Wednesday, lifting futures prices for oil to a close above $110 a barrel even after the latest U.S. data showed an unexpected climb in the past week's crude supplies. Crude oil prices have also risen sharply recently, on worries about disruptions to oil exports from the Middle East.

On the New York Mercantile Exchange, crude oil for October delivery added $1.09, or 1%, to settle at $110.10 a barrel,

There are worries U.S. military intervention in Syria could escalate into further instability and violence in the already volatile Middle East. Specifically, the market place wonders what the Syrian regime will do after it's been hit with U.S. missiles.

On Wednesday, the U.S. Energy Information Administration reported an unexpected climb of 3 million barrels in crude stockpiles for the week ended 23 August. Market was looking for a decline of 250,000 barrels. The EIA also said that gasoline supplies fell by 600,000 barrels, while distillate stockpiles, which include heating oil, declined by 300,000 barrels. Gasoline stockpiles were expected to decline by 1.5 million barrels, while forecasts called for an increase of 1 million barrels for distillates.

Among economic data expected for the day, the weekly MBA Mortgage Index remained in a downtrend with today's 2.5% fall marking the fourteenth decline out of the past sixteen readings including last week's 4.6% slide.

Separately, July pending home sales fell 1.3%, which was worse than the 0.2% increase forecast by the consensus. Today's reading follows last month's decrease of 0.4%.

Homebuilding stocks were affected post this data. PulteGroup and D.R. Horton retreated, with shares of PulteGroup off 1.4% and those of D.R. Horton slipping 1.2% in the wake of an industry report that said pending sales of existing U.S. homes declined 1.3% in July.

The health care space advanced as biotechnology rallied. Elsewhere, the discretionary space gained as retailers displayed strength.

Gold prices closed lower on Wednesday, 28 August 2013 after a 2% rally a day earlier, but losses were modest in the wake of continued concerns about possible military action against Syria.

Gold for December delivery fell $1.40, or 0.1%, to settle at $1,418.80 an ounce on the Comex division of the New York Mercantile Exchange. Prices spent the bulk of the trading session wavering between small losses and gains, though they touched a high of $1,434 and a low of $1,413.20. Silver prices also retreated and they fell by 26 cents, or 1.1%, to $24.39 an ounce.

For every seven stocks falling, roughly eight gained on the New York Stock Exchange, where nearly 599 million shares traded. Composite volume approached 2.8 billion.

Indian ADRs ended mostly higher on Wednesday. In the IT space, Wipro rose 2.24% at $9.14 and Infosys was up 0.09% at $46.46. In the banking space, ICICI Bank added 3.14% at $26.26 and HDFC Bank gained 1.94% at $27.85. In the other sectors, Sterlite Industries advanced 3.15% at $5.56 and Tata Motors slipped 0.04% at $22.30.

Tomorrow, weekly initial claims and the second estimate of second quarter GDP will be reported at 8:30 ET.

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