Stocks edge higher as oil prices ease

NEW YORK (CNNMoney) — U.S. stocks edged higher at Friday’s open, as oil prices backed off its highs and investors mulled over the latest reading on U.S. economic growth.

The Dow Jones industrial average (INDU) rose 41 points, or 0.4%; the S&P 500 (SPX) was up 7.7 points, or 0.6%; and Nasdaq Composite (COMP) rose 23 points, or 0.9%.

The Dow was led higher by shares of Boeing (BA, Fortune 500), which rose 4% after the Defense Department awarded the aerospace giant a $30 billion tanker contract.

“You might get a little bit of a relief rally, because oil prices are hovering around the $96 to $97 [per barrel] range,” said Peter Cardillo, chief market economist for Avalon Partners. “We’re looking at stable commodity prices.”

Today’s gains comes after the Dow posted losses for three consecutive sessions, losing 285 points this week, or 2.5%. Monday and Tuesday’s plunges were the first back-to-back triple-digit declines since June.

“We’ve seen a pullback in oil prices and there seems to be a direct correlation in the last couple days between stock prices and oil prices,” said Mark Luschini, chief investment strategist for Janney Montgomery Scott.

On Thursday, stocks rebounded from afternoon lows to finish with small losses, as oil prices retreated from two-year highs above $100 a barrel.

All three major indexes are still on track for their worst week since August. Despite the pullback, stocks are still higher for the month of February and the year.

Economy: The U.S. Bureau of Economic Analysis reported the real gross domestic product increased at an annual rate of 2.8% in the fourth quarter. This is a revision from a preliminary report.

The GDP revision was much less than 3.3% increase economists forecasted, according to a consensus surveyed by Briefing.com.

A final read on February’s University of Michigan consumer sentiment survey also is on the docket. The index is expected to remain unchanged at 75.1.

Companies: JC Penney (JCP, Fortune 500) reported a 30% surge in quarterly earnings, to $1.09 per share. The retailer beat analysts’ forecast, who were expecting the department store chain to earn $1.08 a share. The company attributed the increase to the launch of “exclusive brands,” like Liz Claiborne (LIZ).

World markets: European stocks rose in morning trading. Britain’s FTSE 100 edged higher by 1%, the DAX in Germany ticked up 0.6% and France’s CAC 40 gained 1.5%.

Asian markets ended the session mostly higher. The Shanghai Composite was flat, while the Hang Seng in Hong Kong rose 1.8% and Japan’s Nikkei added 0.7%.

Currencies and commodities: The dollar gained strength against the euro and the British pound but slipped against the Japanese yen.

Oil for April delivery fell 16 cents, or 0.2%, to $97.08 a barrel.

Motorists are feeling the spike. The nationwide average price for gasoline rose nearly 6 cents overnight, according to AAA. This means that prices have jumped nearly 12 cents this week.

Gold futures for April delivery dipped $10.20, or about 0.8%, to $1,405.60 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.46% from 3.42% late Thursday.  

First Published: February 25, 2011: 9:45 AM ET