Investors are caught between two conflicting thoughts: the improving U.S. economy, lower energy costs and higher consumer spending are expected to boost profits for many companies. But the recent drop in oil prices, which has accelerated in recent days, has investors worried that earnings for energy companies will suffer.
The Dow Jones industrial average rose 63.19 points, or 0.4 percent, to 17,596.34. It was up 225 points earlier.
The Standard & Poor’s 500 index rose 9.19 points, or 0.5 percent, to 2,035.33 and the Nasdaq composite rose 24.14 points, or 0.5 percent, to 4,708.16.
Companies that rely the most on spending by consumers rose the most Thursday. The S&P 500 consumer discretionary sector, a category that includes department stores and other retailers, gained 0.7 percent, while makers of consumer staples increased 0.8 percent.
Urban Outfitters, GameStop, Coach, Best Buy and Macy’s were among the biggest gainers.
The rise came after the Commerce Department said U.S. retail sales rose by 0.7 percent in November. The encouraging retail sales report could not have come at a more crucial time for retailers, since year-end sales often mean the difference between retail companies reporting a profit or a loss for the year.
Falling gasoline prices led to a decline of 0.8 percent in sales at gas stations, but that money was likely spent elsewhere, investors said.
Oil fell 99 cents to close at $59.95 a barrel, its first time below $60 a barrel in more than five years.
While lower oil prices are good for consumers, many energy companies rely on high oil prices to justify drilling in remote parts of the globe for hard-to-reach reserves of crude. Energy companies also make up a big part of the U.S. stock market.
Oil drillers and drilling equipment suppliers were among the biggest decliners. Nabors Industries fell 34 cents, or 3 percent, to $10.51. Transocean lost 37 cents, or 2 percent, to $17.02. Chesapeake Energy fell 43 cents, or 2.5 percent, to $16.71.
With the decline in oil, the S&P 500’s energy component is down 7 percent this week alone. It’s down 13 percent for the year.
Among individual companies, Lending Club, a peer-to-peer lending platform, rose $8.43, or 56 percent, to $23.43 on its first day of trading. Lending Club’s initial public offering priced at $15 a share on Wednesday night, above the estimated range.
U.S. government bond prices were little changed. The yield on the 10-year Treasury note held at 2.17 percent. The dollar rose 1.4 percent against the yen to 118.98 yen. The euro fell 0.7 percent to $1.2395.
Precious and industrial metals futures closed mixed. February gold fell $3.80 to $1,225.60 an ounce, March silver fell eight cents to $17.11 an ounce and March copper rose three cents to $2.92 a pound.
In other trading of energy futures, Brent crude, a benchmark for international oils used by many U.S. refineries, fell 56 cents to close at $63.68 in London.
Wholesale gasoline fell 1.8 cents to close at $1.624 a gallon on the New York Mercantile Exchange. Heating oil rose 1.5 cents to close at $2.061 a gallon and natural gas fell 7.2 cents to close at $3.634 per 1,000 cubic feet.