Stocks Rise as Inventories Fall

Stocks started strong Wednesday ahead of the first major economic readings of the week.

The Dow Jones industrial average pushed 31 points higher to 10,595 after more than an hour of trading. The S&P 500 index was up almost 8 points to 1,148. The Nasdaq composite gained 20 points to 2,361.

Over the Counter securities saw a fairly equal number of bulls and bears with more than two-thousand stocks unchanged. Pink Sheet shares saw more than one advancer for every decliner.

Wholesale inventories: Wholesale inventories are shrinking while gross sales continue to climb. The Commerce Department announced Wednesday that wholesale inventories fell 0.2% in January, compounding a 1% drop in December. However, sales rose for the tenth straight month by 1.3%.

Economists had expected inventories would post a small 0.2% increase.

Consistent growth in business inventories would be a welcome sign because it proves sales are improving. It’s also a positive trend for manufacturers who could increase staff to keep up with additional demand. Growth in consumer spending and job creation are considered keys to creating sustained economic growth.

Bank of America: Some Bank of America customers could soon see their debit card declined. Bank of America (NYSE: BAC) will keep debt card purchases from going through if there isn’t enough money in the account because of overdraft fees.

A new rule set by the Federal Reserve will ban banks from charging such fees without getting permission from the customer first. Since the bank can’t ask a customer if they would pay an overdraft fee at the register, it will simply stop any transaction that would put someone in the red.

Anyone who tries to withdraw more than their balance at the ATM will have to agree to pay a $35 overdraft fee before they can get the money.

Bank of America’s new policy will kick in on June 19 for new accounts and in early August for existing accounts. The Fed’s rules are set to start July 1.

Oil Demand: Demand for oil is growing. The Organization of the Petroleum Exporting Countries said Wednesday that oil demand around the world is projected to grow by 900,000 barrels per day in 2010.

OPEC raised its own demand forecast to 85.24 million barrels per day since it supplies nearly 35% of the world’s oil. That’s 100,000 barrels per day higher than its February projections. It also said demand for OPEC crude was estimated at 29 million barrels a day.

OPEC’s 12-member producer bloc has not revised its production quotas since the end of 2008, when it enacted a series of cuts aimed at lowering its output by 4.2 million barrels per day. The cuts came as oil prices plummeted from highs of roughly $147 per barrel to the mid-$30’s on the back of the global meltdown.

The U.S. Energy Information Administration said earlier that OPEC members stood to earn $767 billion from oil exports this year. That’s an almost 34% gain from last year when oil prices fell amid crumbling global demand.

Oil prices climbed above $82 a barrel after more than an hour of trading Wednesday as the dollar fell versus the euro and gained versus the yen.