U.S. Stocks Turn Up

By JONATHAN CHENG

U.S. stocks headed higher, recouping some of the previous session's sharp selloff even as crude oil rose above $100 a barrel and gold rose to a new record, due to heightened tensions in the Middle East.
The Dow Jones Industrial Average added 40 points, or 0.3%, to 12100 in a day of choppy trading. The Standard & Poor's 500-stock index increased six points to 1313 in late trading, while the Nasdaq Composite gained 20 points to 2757.
The market moves came as crude oil rose to $101.98 a barrel for April delivery on the New York Mercantile Exchange. Brent crude oil, traded in London, rose to $116.03 a barrel.
The rise in oil prices has been underpinned by fears that the unrest in the Mideast and North Africa will disrupt oil supplies from the region. The blue-chip Dow on Tuesday slumped 1.4% on worries that sustained increases in oil prices may represent a threat to economic growth.
The Saudi Arabia stock index, already down sharply in recent days, fell 3.9% Wednesday to bring its weekly decline to 15%.
"Any mention of Saudi Arabia brings instant fear and sends the market down," said Robert Pavlik, chief market strategist at Banyan Partners. "People are wondering if yesterday's selloff was such an appropriate move to be making. [These high oil prices] are still so new that it's hard to completely factor in."
Even so, concerns lingered that the Middle East turmoil still has to run its course.
"I don't think we're anywhere through this," said Barry James, president and chief executive of James Investment Research, who has lowered his exposure to equities to 40% in some portfolios, from 55%. "There's still a lot of room for the market to pull back."
Domestically, Mr. James says he has trouble finding reasons for the bull market to continue its run, with the Federal Reserve's quantitative easing and federal stimulus programs set to wind down soon.
Leading the advancers were technology and industrial stocks. Caterpillar and 3M led the Dow components, both up 1.4%, while Hewlett-Packard added 1.2% and Intel gained 1.1%.
Investors were also keeping an eye on U.S. private-sector employment, which increased by 217,000 last month, better than consensus expectations of 170,000 new jobs. The strong numbers come ahead of Friday's closely watched nonfarm-payrolls report.
In its periodic "beige book" report on nationwide economic activity, the Fed said that overall economic activity "continued to expand at a modest to moderate pace."
In corporate news, MetLife fell 5.2% after American International Group said it was accelerating plans to cash out of its stake in MetLife through public offerings that could raise more than $9 billion in proceeds, most of which will be used to repay U.S. taxpayers for the AIG bailout ahead of schedule. AIG rose 1.7%.
Yahoo rose 3.8% after The Wall Street Journal reported the Internet company was looking to sell its 30% stake in Yahoo Japan, citing an unnamed source.
BJ's Wholesale Club gained 3.4% amid rising revenue and a 5.5% increase in same-store sales last month, beating expectations for a 3.5% increase.
Costco Wholesale was off 2.6% despite reporting a 16% rise in fiscal second-quarter earnings on the back of higher sales and raising its dividend to 20.5 cents a share. Membership fees, which typically make up the majority of the company's operating profit, rose 10%. Costco's declines were the worst among consumer-staple stocks, one of the worst performers of the day.
Staples added 0.6% after fiscal fourth-quarter profit jumped 17%, though North American retail sales, which account for the largest share of revenue, slipped 0.4%.
Technology giant Apple rose 1.4% after Chief Executive Steve Jobs appeared at a San Francisco event to introduce a new iPad tablet. Verizon Communications and AT&T, which will carry the new device, were up 1.1% and 0.5%, respectively.
In other assets, gold edged 0.5% higher to a new record settlement of $1,437.20 a troy ounce, while Treasurys fell to push the yield on the benchmark 10-year note up to 3.47%. The dollar slipped against its rivals, with the euro rising to $1.3859.
Asian stock markets fell. The Nikkei Stock Average lost 2.4%, its biggest percentage loss since Aug. 31. European stocks were lower, with the Stoxx Europe 600 finishing down 0.7%.

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