Stocks jump on drop in oil prices
NEW YORK » A drop in oil prices below $60 a barrel sent stocks soaring yesterday, carrying the Dow Jones industrial average 136 points higher and past 11,000 for the first time in a month. A surge in retail sales added to the market's good mood.
"Oil below $60 a barrel grabbed folks' attention," said Bob Sitko, who manages more than $500 million as a lead portfolio manager with USAA Private Investment Management. "When the market decides to pay attention to things is a bit of Rubik's cube, but this is a big deal."
Other analysts attributed some of the rise to sheer momentum, as Wall Street initially had a muted reaction to oil's decline and the pickup in retail sales.
"It's sort of what other people think other people are doing," said Sandy Lincoln, chief market strategist, Wayne Hummer Investments. "You get this momentum buying and it could move the market pretty high, pretty quickly. (But) it could go the other way tomorrow."
The market seemed to shed completely Monday's torpor, when investors sent shares lower as they worried about new Federal Reserve Chairman Ben Bernanke's remarks before Congress today, his first appearance on Capitol Hill as Fed chairman.
The Dow rose 136.07, or 1.25 percent, to 11,028.39, its first foray past 11,000 since Jan. 12.
Broader stock indicators also closed sharply higher. The Standard & Poor's 500 index rose 12.67, or 1 percent, to 1,275.53, and the Nasdaq composite index rose 22.36, or 1 percent, to 2,262.17.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange
Bonds fell, with the yield on the 10-year Treasury note rising to 4.61 percent from 4.58 percent late Monday. The U.S. dollar was mixed against other major currencies in European trading. Gold prices were lower.
Crude oil futures fell amid expectations that a U.S. supply report Wednesday will show higher crude inventories. A barrel of light crude settled at $59.57 a barrel, down $1.67, in trading on the New York Mercantile Exchange.
Energy prices have been declining steeply. Gasoline futures have fallen roughly 22 percent in the last two weeks, while crude is down roughly 13 percent and natural gas prices are 50-percent lower than their mid-December peak, Sitko said.
The day's other heartening economic news came from the Commerce Department, which said retail sales outside of autos rose by the largest amount in more than six years.