Oil Below $130, US stocks end higher

US stocks end higher on oil price fall

Index Value: 11,446.66
Change: + 207.38 (1.85%)
Prev Close: 11,239.28
Day's Range: 11209.56 - 11446.66
52wk Range: 10,732.00 - 14,280.00

Wall Street shot higher on Thursday, extending its rally into a second session as tumbling energy prices bolstered an already upbeat mood that followed stronger-than-expected quarterly reports from big names like JPMorgan Chase and United Technologies. The Dow Jones industrial average rose more than 200 points, bringing their two-day advance to more than 480. Investors got a double dose of good news after weeks of angst about the economy. Light, sweet crude fell $5.31 to settle at $129.29 a barrel; oil has dropped more than $15 in just the past three sessions. And early on Thursday, three components of the Dow industrials, JPMorgan Chase & Co, United Technologies Corp and Coca-Cola Co, issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions. The reports let investors put aside some of their worst fears about the economy. Still, Wall Street has had some up periods in the past few months as optimism grew, only to fall back into a downturn as worries about the financial sector and the economy have welled back up.

"The sentiment has just been so negative that even a whiff of positive news is driving the markets," said Kevin Dorwin, principal at wealth management firm Bingham, Osborn & Scarborough in San Francisco. "Oil the key factor right now because inflation has been on the top of investors' minds and a reduction in the price of oil signals that perhaps inflation will not get out of hand. That's very positive for both the stock and bond markets." Beyond oil, natural gas prices also fell sharply Thursday after the Energy Department said domestic stockpiles rose last week, signaling a drop in demand. While levels remain below those of recent years natural gas fell 86.1 cents to settle at $10.537 per 1,000 cubic feet. A sustained drop in energy costs would be welcome news for nearly all parts of the economy. Consumers have been hard-pressed by higher fuel and food costs. Wall Street is worried they will pare their spending on discretionary items to make room in their budgets for the higher-priced necessities.

A pullback could be troublesome as consumer spending accounts for more than two-thirds of US economic activity. But the declines in energy and profit reports from marquee names left investors in an acquisitive mood again Thursday. The Dow rose 207.38, or 1.85 percent, to 11,446.66. The Dow on Wednesday surged 276 points after oil fell and Wells Fargo & Co. posted better-than-expected earnings. The 4.4 percent advance over two days was the Dow's best two-day percentage gain since October 2002 and the point increase gave the blue chips their best back-to-back point gain since late November last year. Broader stock indicators also rose Thursday. The Standard & Poor's 500 index advanced 14.96, or 1.20 percent, to 1,260.32, and the Nasdaq composite index rose 27.45, or 1.20 percent, to 2,312.30. Advancing issues outpaced decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.96 billion shares compared with 1.73 billion shares traded Wednesday. Bond prices showed steep declines as investors turned away from the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 4.01 percent from 3.94 percent late on Wednesday. The dollar was mixed against other major currencies, while gold prices rose. Continued...Next >>
----------------------------------
Dow Logs Best 2-Day Gain Since 2002
Oil Prices Settle Below $130 in Volatile Trading
Microsoft's $4.3 Billion Profit Falls Short; Shares Slide
Google Earnings Miss Expectations; Shares Drop
IBM Profit Rises 22%, Topping Expectations


Source: CNBC, ET