Wall Street today managed to survive the weekend terrorist attacks that killed 22 people in Saudi Arabia and pushed oil prices past $42 a barrel for the first time ever.
Crude oil futures jumped $2.45 a barrel on the New York Mercantile Exchange, their biggest one-day gain since March 24, 2003, when U. S. troops were invading Iraq.
The surge in crude oil prices overwhelmed a pair of positive economic reports, keeping stock prices underwater until the final half hour of trading when they finally broke back into positive territory.
The Dow Jones industrial average closed up 14 points at 10202.65. The Nasdaq Stock Market composite index gained 4 points to 1990.77. The Standard & Poors 500 stock index closed up a little more than half a point at 1121.20.
The energy futures market has become a dominant influence on stocks, so powerful that it routinely takes market leadership away from economic and business data that ordinarily sets the direction of the market.
Ordinarily the market probably would have responded positively to today's reports that construction spending rose to a record annual rate in April and manufacturing expanded for the 12th month in a row. New buildings are going up at a record rate of $970 billion, the Commerce Department reported, and the Institute for Supply Management said its index of manufacturing now shows a full year of uninterrupted growth.
The markets did move up this morning after those reports were issued, but stocks soon gave back their gains as traders fretted about the implications of Sunday's attacks in Saudi Arabia.
If terrorists can kill foreign civilians, they can attack Saudi oil installations, traders warned. That threat more than offset the potential benefits of the promise by Saudi officials to pump more oil. While that proposal will be on the table when OPEC meets later in the week, any positive influence was wiped out today by fear the world oil market might be disrupted.