Wall Street rebounds along with oil prices
NEW YORK » Wall Street rebounded yesterday, rising moderately as crude oil surged more than $2 a barrel and triggered a rally among energy producers. Investors regained their optimism about corporate profits after a series of positive earnings reports.
Energy prices spiked after the U.S. Energy Secretary Samuel Bodman said the United States will double the size of the nation's Strategic Petroleum Reserve. Prices were already rising as a cold snap in the northeast United States was seen increasing demand for heating fuel in the region.
Exxon Mobil Corp. led blue chips and was among the Dow Jones industrials' biggest gainers, while fellow refiners ConocoPhillips and Chevron Corp. also surged during the session. The advance in oil stocks helped the Dow recover from an 88-point decline Monday, its biggest drop in two months and a reaction to investor uneasiness about earnings.
The markets also got a lift yesterday from robust earnings reports from United Technologies Corp. and Texas Instruments Inc. This helped offset a warning from telecommunications equipment maker Alcatel-Lucent that it would not post a profit during the fourth quarter because of a steep decline in sales.
"Earnings are not coming in all that bad," said Brian Gendreau, an investment strategist with ING Investment Management. "There is an absence of any real bad news, leading indicators are up, and companies are not falling off the table. That's consistent with the modest rise in the Dow."
The Dow rose 56.64, or 0.45 percent, to 12,533.80.
Broader stock indicators also advanced. The Standard & Poor's 500 index was up 5.04, or 0.35 percent, at 1,427.99, and the Nasdaq composite index added 0.34, or 0.01 percent, to 2,431.41.
The Russell 2000 index of smaller gained 7.42, or 0.95 percent, to 785.38.
Advancing issues led decliners by a 3 to 2 margin on the New York Stock Exchange, where consolidated volume came to 3.02 billion shares, up from 2.89 billion shares in the previous session.
Bond prices fell, with the yield on the benchmark 10-year Treasury note rising to 4.81 percent from 4.76 percent late Monday.
In economic news, the Richmond Fed Survey showed a slip in its manufacturing index this month. Meanwhile, the Conference Board said U.S. economic activity is set to increase slightly in the coming months.
The dollar was mixed against other major currencies, while gold prices spiked.
A barrel of light, sweet crude rose $2.47, or 4.7 percent, to settle at $55.04 on the New York Mercantile Exchange.
As has been typical in previous sessions, oil companies got a boost on the rebound in crude prices. The refiners stand to benefit if the government expands its reserves.