Stocks finish higher as energy prices fall
NEW YORK » Wall Street shot higher yesterday, extending its rally into a second session as tumbling energy prices bolstered an already upbeat mood that followed stronger-than-expected quarterly reports from big names like JPMorgan Chase and United Technologies. The Dow Jones industrial average rose more than 200 points, bringing their two-day advance to more than 480.
Investors got a double dose of good news after weeks of angst about the economy. Light, sweet crude fell $5.31 to settle at $129.29 a barrel; oil has dropped more than $15 in just the past three sessions. And early yesterday, three components of the Dow industrials -- JPMorgan Chase & Co., United Technologies Corp. and Coca-Cola Co. -- issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions.
Beyond oil, natural gas prices also fell sharply yesterday after the Energy Department said domestic stockpiles rose last week -- signaling a drop in demand. While levels remain below those of recent years natural gas fell 86.1 cents to settle at $10.537 per 1,000 cubic feet.
The Dow rose 207.38, or 1.85 percent, to 11,446.66 after gaining 276 points on Wednesday. The 4.4 percent advance over two days was the Dow's best two-day percentage gain since October 2002 and the point increase gave the blue chips their best back-to-back point gain since late November last year.
The Standard & Poor's 500 index advanced 14.96, or 1.20 percent, to 1,260.32, and the Nasdaq composite index rose 27.45, or 1.20 percent, to 2,312.30.
Advancing issues outpaced decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.96 billion shares compared with 1.73 billion shares traded Wednesday.
The Russell 2000 index of smaller companies rose 9.88, or 1.44 percent, to 696.63.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 4.01 percent from 3.94 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices rose.
Corporate results helped buoy investor sentiment. JPMorgan Chase posted a 53 percent decline in its second-quarter earnings as mortgage and other loan defaults worsened, but the decline in profits wasn't as steep as Wall Street had feared and the stock rose $4.86, or 13.5 percent, to $40.80.
Among other financials that gained, Fannie Mae and Freddie Mac jumped after Fitch Ratings affirmed long-term issuer default ratings on the government-chartered mortgage giants. Fitch cut Fannie's preferred stock rating and put Freddie's on watch for a possible downgrade. Investors have worried that they would run into serious financial troubles because of faltering mortgages. Fannie Mae rose $1.68, or 18 percent, to $10.93, and Freddie Mac rose $1.50, or 22 percent, to $8.33.
United Technologies rose $3.59, or 5.9 percent, to $64.70 after posting an 11 percent increase in its second-quarter profit.