Stocks rise after drop in oil prices
NEW YORK » Stocks rallied higher yesterday after oil futures fell by more than $1 a barrel and Dow Jones industrial Boeing Co. said its earnings had more than doubled.
A late afternoon tumble in oil prices sent stocks higher in the final hour of trading. Oil fell $1.36 a barrel to settle at $66.56 on the New York Mercantile Exchange.
Stocks had stayed in a tight range most of the day, following Google Inc.'s fourth-quarter earnings, which missed analysts' estimates, the first time the company hasn't pleasantly surprised investors since its August 2004 initial public offering. It closed down $30.88, or 7.1 percent, at $401.78, losing more than $9 billion in market capitalization in a day.
Analysts were reassured by the fact that the overall market, which traded in a tight range during January, wasn't overwhelmed by Google's results.
"The fact that the market is continuing to stay at the upper end of the trading range, even with oil prices continuing to hover around their highs is positive, it indicates investor confidence," said Peter Cardillo, chief strategist, senior vice president and market analyst, S.W. Bach & Co.
The Dow rose 89.09, or 0.82 percent, to 10,953.95.
Broader indexes were also higher. The Standard & Poor's 500 index rose 2.38, or 0.19 percent, to 1,282.46, and the Nasdaq composite index rose 4.74, or 0.21 percent, to 2,310.56.
Bonds fell as investors mulled possible future Fed rate hikes, with the yield on the 10-year Treasury note rising to 4.56 percent from 4.52 percent late Tuesday. The U.S. dollar was higher against other major currencies in European trading. Gold prices fell.
Google's tumble continued a trend the market has seen in recent weeks: Stocks that disappoint fall hard. Some that have taken a recent beating, such as General Electric Co. and Citigroup Inc., have yet to recover.
"There's 'hot money' -- hedge fund money, more aggressive money -- if they sense anything out of the ordinary, they bail out quickly, en masse," said Ralph Acampora, managing director of technical research at Knight Capital Group Inc., an asset management firm.
The market may look placid, he said but "the point is that there's selling under the surface, there's some profit taking and some of it is nasty."
In economic news, the Institute for Supply Management said manufacturing grew in January, but at a slower pace than December. The group said deliveries of goods are slowing and prices are increasing.