Syria, oil prices prompt increase in the market

NEW YORK - The stock market edged higher Wednesday as investors continued to focus on the likelihood of a U.S.-led attack on Syria. Energy stocks rose sharply as the price of oil increased to the highest in more than two years.

The Dow Jones industrial average rose 48.38 points, or 0.33 percent, to close at 14,824.51. The Standard & Poor's 500 index gained 4.48 points, or 0.27 percent, to 1,634.96. The Nasdaq composite rose 14.83 points, or 0.41 percent, to 3,593.35.

The quick rise in the price of oil has caused investors to worry. Costlier oil almost always translates into higher fuel expenses for businesses and consumers, weighing on consumer spending and the economy. While Syria produces little oil, a regional conflict in the Middle East could lead to supply disruptions in an area where half the world's proven oil reserves lie.

Oil rose $1.09, or 1 percent, to $110.10 a barrel, the highest price since May 2011. It went as high as $112 a barrel overnight.

Energy companies were the biggest gainers in the S&P 500. Marathon Oil rose $1.22, or 4 percent, to $34.60 and Dow component Chevron climbed $3, or 3 percent, to $121.81.

Before Syria grabbed the headlines, the focus had been on the Federal Reserve and whether the central bank was going to pull back on its massive bond-buying program, which has kept interest rates extremely low.

If oil prices remain at these elevated levels, the Fed may have to delay easing back on its bond purchases, said Quincy Krosby, market strategist with Prudential Financial.

"The Fed would see higher oil prices, particularly if they linger at these higher levels, as a definite hindrance to employment and consumer spending," Krosby said.

The Syria standoff comes during what is typically a quiet week for stocks.

There are little economic data being released and only a handful of corporate earnings. It's also the week before Labor Day, when many on Wall Street are on vacation. Volume on the New York Stock Exchange on Monday was the lowest of any full day of trading this year.

The next big day for the market will come next week, when investors get the August jobs report Sept. 6, Krosby said.

In corporate news, Zales soared $2.67, or 30 percent, to $11.63 after the jewelry-store chain reported full-year income of 24 cents per share, well ahead of the 17 cents analysts expected.

Avago, an electronics maker, rose $1.73, or 5 percent, to $38.28. The company earned 74 cents a share in its latest quarter, beating the 68 cents expected by financial analysts.