Stocks mostly gain as investors balance Dubai fears with holiday retail sales

Stocks mostly rise as investors look to consumers

NEW YORK — Investors set aside some of their worries about a possible debt crisis and focused instead on encouraging signs about consumer spending.

Stocks rose modestly Monday, steadying after Friday’s steep drop. Global markets are rebounding after falling in response to news that Dubai World, the main investment arm of the Persian Gulf city-state, asked to defer payments on $60 billion in debt for six months.

Investors were initally anxious about the possibility that a debt default by Dubai could touch off a new round of lending problems even as credit markets are still recovering from last year’s near-shutdown following the collapse of Lehman Brothers.

However, it appeared U.S. investors hold little of Dubai’s debt, which has eased some concerns. The United Arab Emirates, where Dubai is located, also said Sunday it will make extra funding available to all banks in the country, including foreign banks with local offices.

Analysts say European banks have more exposure than their U.S. counterparts. Asian stocks rallied sharply on Monday, while European markets were lower. Dubai’s market, which was opened Monday for the first time since the debt deferment announcement, fell nearly 6 percent.

Rob Lutts, president and chief investment officer of Cabot Money Management, said that while some investments will be lost in Dubai, the global stock markets have now accounted for those potential losses.

“We’ve seen the impact,” Lutts said, pointing to Friday’s sharp declines. “I think that issue is known now.”

Some encouraging signs from U.S. consumers helped to offset concerns about fallout from the Dubai debt crisis. Preliminary figures by ShopperTrak, a research firm that tracks more than 50,000 outlets, showed sales rose 0.5 percent on Friday, the kickoff to the holiday shopping season. Online sales jumped 11 percent Thursday and Friday, according to comScore, an Internet research firm.

A drop in the dollar also gave a boost to commodities, which helped energy and materials stocks.

In midmorning trading, the Dow Jones industrial average rose 32.35, or 0.3 percent, to 10,342.27. The broader Standard & Poor’s 500 index rose 3.66, or 0.3 percent, to 1,095.15, and the Nasdaq composite index rose 1.00, or 0.1 percent, to 2,139.44.

The modest moves came after stocks tumbled in holiday-shortened trading Friday on concern about Dubai’s debt problems. The Dow dropped 155 points before closing three hours early for the Thanksgiving holiday. It had fallen much as 233 points in early trading.

The move away from riskier stocks sent the price of safe-haven investments like Treasury bonds higher.

On Monday, bond prices retreated, sending yields higher. The yield on the benchmark 10-year Treasury note rose to 3.24 percent from 3.21 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.01 percent.

The dollar mostly fell against other major currencies, while gold rose.

Light, sweet crude rose 38 cents to $76.43 per barrel on the New York Mercantile Exchange.

Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 164.9 million shares.

Overseas, Japan’s Nikkei stock average rose 2.9 percent. Britain’s FTSE 100 fell 0.4 percent, Germany’s DAX fell 0.9 percent and the CAC-40 in France dropped 0.6 percent.