Oil and Recovery

Stocks are lower Friday as investors seemed unmoved by Fed Chairman Ben Bernanke’s call today for banking supervisors to pay “close attention” to compensation practices as they examine the soundness of financial institutions.

At 3:00 pm ET, the Russell 2000 (NYSE:IWM) is down 2.68% at 402.20, while the Dow is down 1.48% at 7,291.36, and the S&P 500 is down 1.82% at 769.77.

Small caps on the move today include Books-A-Million, Inc. (Nasdaq:BAMM), up 25% after declaring a dividend and reporting fourth-quarter and year-end results. Home retailer Kirkland’s, Inc. (Nasdaq:KIRK) is up 12% after providing revenue guidance and reporting Q4 results, and VIVUS, Inc. (Nasdaq:VVUS) is up over 11% following new data on its obesity drug.

*****Oil prices have moved over $50 a barrel. There are a few factors at work here. OPEC’s cut production. Of course, that’s been ongoing, and OPEC’s moves have done little to prop up prices as demand around the globe falls.

Crude started moving higher after the recent stock market rally began. Bernanke was out, attempting to soothe investors with his “Recovery in 09” campaign. And if there is to be an economic recovery, oil demand will rise. That’s as direct a relationship as there is in the financial markets.

Oil rallied again after Bernanke announced that the Fed would buy over $1 trillion in various kinds of debt. The market thinks the Fed’s move will help. We know, . . .

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