What’s Driving Prices Higher

  • March 11, 2002
  • Paul Letourneau

Stocks shook off their morning lows Monday as investors grew more
optimistic about the strength of a rebound in the economy.

The
Dow Jones Industrial Average June futures
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10603.000 up 11.00. The June Nasdaq 100 Composite index
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slipped 8.000 to 1556.000. The June S&P 500 futures
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2.40 to close at 1169.00.

Other major stock indexes were higher. The Standard & Poor’s 500-stock index
edged up 3.95 to 1168.26, the New York Stock Exchange Composite gained 2.12 to
604.22, and the Russell 2000 small-stock index gained 0.90 to 500.75.

Bonds were mixed and the dollar was weaker.

Oil prices continued to push higher
 Monday, driven by rising speculation that
the U.S. will attack Iraq. April crude-oil futures
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on the New York Mercantile Exchange. Other energy commodities were also higher. April heating oil
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rose 1.51 cents to 63.45 cents a gallon, while April gasoline
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advanced 2.29 cents to 79.10 cents a gallon.

Also helping the market: a shutdown of refinery components at Tesoro Petroleum
refinery in Anacourtes, Wash.

In addition, MTBE, an oxygenate blending component used to make gasoline burn
cleaner, is 8 cents a gallon higher than a week ago, amid recent spate of
refinery problems– only a few days after a bill to ban the chemical
gathered more support in Washington. The proposed legislation that would end mandated oxygenate
additives such as
MTBE, got another vote of support from U.S. Energy Secretary Spencer Abraham who
joined Senate leaders Friday to promote the bill. The energy bill would do away with a Clean Air Act requirement that relatively
clean-burning reformulated gasoline contain oxygenates such as MTBE and the
ethanol-derived ETBE. It would also ban by 2006 use of the additive MTBE, which
has raised concern about water contamination.

Arabica coffee futures on the Coffee, Sugar & Cocoa exchange took off Monday,
breaking out of their six-month range and settling at a 28-week high. The
May coffee contract
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(50.75). May coffee ended at 54.15 up 4.40 or 8.63%. May cocoa
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also enjoyed a nice move upward today. Cocoa rallied to 1550.000 up 26.00 or
1.71%.

Wheat futures fell sharply on the Chicago Board of Trade due to slow export
selling. Corn and soybeans also retreated. Wheat for May delivery
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fell 3 3/4 cents to $2.74 a bushel; May corn
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$2.09 1/2 a bushel; May soybeans
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3/4 a bushel.

Precious metals traded mixed today. April gold
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division of the New York Mercantile Exchange traded $1.00 higher than Friday at
$291.30 an ounce. May silver dropped 2 cents to trade at $4.49 an ounce and May
copper dropped .650 to 74.600.