Stocks soar on lower oil, Bush agenda
Wall Street bounded higher for the second straight day Thursday as investors reveled in sharply falling oil prices and the pro-business agenda of the second Bush administration. The Dow Jones industrials gained more than 177 points for its best day of 2004, while the S&P 500 closed at its highest level since early 2002.
Oil prices tumbled below the $49 per barrel mark, giving investors hope that crude, which climbed steadily through October, could be stabilizing. A barrel of light crude was quoted at $48.82, down $2.06, on the New York Mercantile Exchange — the lowest settlement price since Sept. 29.
“I think oil has a lot to do with it,” said Michael Palazzi, managing director of equity trading at SG Cowen Securities. “There are some technicals here that have come through as well, but oil is a huge part of this rally.”
The Dow Jones industrial average rose 177.71, or 1.75 percent, to 10,314.76, adding to a 101-point gain on Wednesday. It was the biggest one-day point gain for the Dow since Oct. 1, 2003, and its best close since Sept. 14.
Broader stock indicators were strongly higher. The Standard & Poor’s 500 index was up 18.47, or 1.62 percent, at 1,161.67, its highest closing level since March 19, 2002.
The Nasdaq composite index gained 19.30, or 0.96 percent, to 2,023.63, its highest close since June 30.
The Dow has posted gains in seven of the last eight sessions, climbing 5.79 percent since Oct. 25. The Nasdaq has gained 5.73 percent and the S&P 500 climbed 6.11 percent over the same time period, and both indexes enjoyed their eighth straight positive session.
Whether the rally will continue will likely depend on whether today’s job creation report from the Labor Department shows strong employment gains. The Federal Reserve meeting next Wednesday — which will likely result in a quarter percentage point hike in interest rates — is also expected to move the market.
“I think there’s a potential here to break out of the gentle downward trend we’ve seen since April,” said Rod Smyth, chief investment strategist at Wachovia Securities. “We’re now back to the issues that are more likely to dominate, which is Fed policy and oil prices and prospects for inflation, those kind of things.”
In perhaps a positive precursor to today’s jobs report, the Labor Department said first-time unemployment claims fell to 332,000 last week, down 19,000 from the previous week — a better showing than Wall Street had expected.
However, the nation’s productivity rose by only 1.9 percent in the third quarter, the smallest gain since late 2002 and far less than the brisk 3.9 percent pace in the second quarter, according to the Labor Department.
Investors welcomed moderate gains in October retail sales, though bellwether Wal-Mart Stores Inc. posted only a 2.8 percent gain in stores open at least a year. Retail analysts were expecting a 3 percent gain. Wal-Mart nonetheless rose $1.78 to $56.26.
Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.78 billion shares, compared with 1.77 billion on Wednesday.
The Russell 2000 index of smaller companies was up 6.80, or 1.14 percent, at 602.13.
Overseas, Japan’s Nikkei stock average rose 0.54 percent. In Europe, Britain’s FTSE 100 closed up 0.21 percent, France’s CAC-40 fell 0.2 percent for the session and Germany’s DAX index gained 0.06 percent.
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