Oil prices drive stock rise

NEW YORK – Stocks climbed Tuesday in an abbreviated holiday trading session after an encouraging report about manufacturing. Energy stocks rose the most because of increased tension over oil-rich Iran.

Major stock indexes wavered in early trading, then moved decisively higher after the government reported that factory orders rose in May. Caterpillar, Alcoa, Boeing and other stocks that depend on manufacturing rose.

The report was welcome after a trade group reported on Monday that U.S. manufacturing shrank in June for the first time since July 2009, the first month after the Great Recession ended.

The Dow Jones industrial average finished 72.43 points higher at 12,943.82. The S&P 500 index rose 8.51 to 1,374.02. The Nasdaq composite index rose 24.85 to 2,976.08.

The price of oil climbed more than 4 percent after Iran threatened to block a critical Persian Gulf shipping route.

On Sunday, Europe enacted stricter rules against buying oil from Iran, trying to force it to be more open about its nuclear program.

New York crude rose $3.91 per barrel to $87.66. The supply fears drove energy stocks up more than 2 percent, more than any other industry in the Standard & Poor 500. Chevron rose $1.51, or 1.4 percent, to $107.37.

Brian Jacobsen, chief portfolio strategist at Wells Fargo Fund Management, was investing in energy companies – not just oil but also natural gas. He figures that as the price of oil rises, more businesses will explore natural gas as an alternative.

“Like it or not,” Jacobsen said, “we’re dependent on a variety of energy sources.”