Rising commodity prices lift stocks

By SARA LEPRO and TIM PARADIS

The Associated Press

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NEW YORK | Investors sidestepped some of their doubts about the economy Tuesday and bought energy and industrial stocks as commodity prices rose.

Stocks ended back-and-forth trading mostly higher as a spike in the price of gold and corporate dealmaking extended an advance from Monday. The gains in commodity prices helped stocks pare early losses.

The Dow Jones industrial average slipped 17 points, while broader indexes rose.

Investors drew some comfort from billionaire investor Warren Buffett’s decision to pay $100 a share for Burlington Northern Santa Fe in a deal valuing the railroad at $34 billion. Meanwhile, tool maker Stanley Works struck a deal to acquire Black & Decker Corp. for $3.46 billion in stock.

Commodities rose broadly and gold jumped to a new high after India’s central bank bought $6.7 billion worth of gold from the International Monetary Fund.

The Dow fell 17.53, or 0.2 percent, to 9,771.91, after being down as much as 86 points. The Dow rose 76 points Monday following reports of improvements in manufacturing and housing.

On Tuesday, the broader Standard & Poor’s 500 index rose 2.53, or 0.2 percent, to 1,045.41. The Nasdaq composite index rose 8.12, or 0.4 percent, to 2,057.32.

Analysts expect trading to be choppy this week, as investors digest a frenzy economic reports that include the government’s employment report for October on Friday. Investors are watching the Federal Reserve, which concludes a two-day meeting on interest rates today, for any clues about the direction of interest rates.

Posted on Tue, Nov. 03, 2009 10:15 PM

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