Lower oil prices keep rally alive

NEW YORK – Another sharp drop in oil prices helped Wall Street overcome profit-taking and extend its rally to a third straight session Thursday. The major indexes posted modest gains in a heavily-traded session.

Concern over China’s decision to raise its benchmark interest rate for the first time in nine years pressured materials and energy stocks, as investors worried about slower demand from the world’s fastest-growing economy. However, the move also encouraged selling in oil.

Oil prices dropped past $51 per barrel, continuing Wednesday’s sharp retreat and coaxing stock buyers back into the market in afternoon trading. A barrel of light crude closed at $50.92, down $1.54, on the New York Mercantile Exchange, the lowest close for oil futures since Oct. 4’s price of $49.91 a barrel.

“Certainly, there’s still a good amount of risk appetite in the market,” said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. “You’re seeing people come back in despite the pressures, and as far as earnings go, so far so good.”

After profit-taking kept the major indexes down through the morning, the Dow Jones industrial average ended up 2.51, or 0.03 percent, to 10,004.54. In the previous two sessions, the Dow had its first back-to-back triple-digit gains since May 2003.

Broader stock indicators were modestly higher. The Standard & Poor’s 500 index was up 2.04, or 0.18 percent, at 1,127.44, and the Nasdaq composite index gained 5.75, or 0.29 percent, to 1,975.74.

The major indexes posted their first three-day stretch of gains since Sept. 10-14.

Advancing issues barely outnumbered decliners on the New York Stock Exchange, where preliminary consolidated volume came to 2.09 billion shares, compared to 2.18 billion on Thursday.

The Russell 2000 index of smaller companies was down 1.56, or 0.3 percent, at 585.62.

Overseas, Japan’s Nikkei stock average rose 1.51 percent.