NEW YORK - A small recovery in commodities and a rally in companies that make consumer staples like toilet paper and pasta helped the financial markets reverse a decline Thursday to end the day with modest gains.
Consumer staples and health care led the market due in part to concerns that high gas prices will erode consumer spending and cut into corporate earnings. Companies that sell everyday items or provide health-related products and services are less dependent on economic growth for their profits since people typically spend money on such items even if they cut back elsewhere. Coca-Cola, McDonald's and Kraft Foods were among the day's biggest gainers.
"(The market) is watching to see the extent to which higher energy prices crowd out consumption more broadly," said Andrew Goldberg, a strategist at JP Morgan Funds. If that happens, consumer staples - along with utilities - are typically better investments because their products serve needs, not wants and because they pay higher dividends.
As copper and gold prices went up, materials companies moved higher. Freeport McMoRan Copper & Gold Inc. reversed its losses from the morning and finished nearly 1 higher.
Stock trading has been affected by huge moves in commodities markets over the past two weeks, including a 9 percent drop in the price of oil a week ago and a 27 percent plunge in the price of silver last week. The volatility in commodities and stocks led investors to park money in less risky and more stable assets like government bonds.