Stocks reverse losses as commodities end off lows

NEW YORK (AP) — Investors might be worried about the soundness of the market’s rally, but they’re also worried about missing it.

Stocks reversed steep losses in the final hour of trading Monday to end little changed. The Dow Jones Industrial average recovered from a 130-point slide to end up a little more than 1 point.

The day offered little economic and corporate news to guide investors. Add in light trading volume, and traders said the mix was right for volatility.

Stephen Carl, head of equity trading at The Williams Capital Group in New York, said the light volume made the market susceptible to quick changes in direction. With fewer players in the market, it takes little to nudge stocks from one direction to the other.

“On light volume, they’re just kind of looking for anything,” he said, referring to traders seeking signals about which way to trade.

Volume picked up somewhat in the final hour and investors moved into stocks of financial companies and retailers.

Falling commodities prices spooked investors earlier Monday, but prices for key industrial materials closed off their lows for the day, giving some relief to the stock market.

Commodities prices have been rallying in recent weeks on optimism that a pickup in manufacturing would increase demand for raw materials such as copper, silver and oil. The recovery in both stock and commodity prices late Monday suggested that investors have not given up on hopes for a turnaround in the economy.

Traders said the market is still trying to determine whether to proceed with a powerful three-month rally.

“There’s a growing sense of confusion as to when exactly this decline in the economy will end and what kind of expansion will come on the heels of it,” said Joseph Battipaglia, market strategist for the private client group at Stifel Nicolaus & Co.

According to preliminary calculations, the Dow rose 1.36, or less than 0.1 percent, to 8,764.49. The Standard & Poor’s 500 index slipped 0.95, or 0.1 percent, to 939.14, and the Nasdaq composite index fell 7.02, or 0.4 percent, to 1,842.40.

Commodities producers including Alcoa Inc. and Freeport-McMoRan Copper & Gold Inc. weighed on the market much of the day.

Like stocks, commodities have been rallying on expectations of an economic recovery. Demand for commodities would likely increase as the economy strengthens.

Monday’s pullback in commodities prices was also due in part to strength in the dollar, which can hurt demand for raw materials by making them more expensive.