Stocks rise after
oil price declines

NEW YORK >> Stocks rallied in quiet trading yesterday as oil prices fell for a fourth straight session, countering a pair of government reports that gave a mixed picture of the economy.

The moderate surge in buying was welcome on Wall Street, where investors have been in no hurry lately to commit new money to stocks. Many have stuck to the sidelines in the face of a long list of worries, including volatile oil prices and persistent terror fears. Contributing to the session's light volume, a number of traders are preparing to take off ahead of the Republican convention in New York next week.

"All things being equal, if the price of oil continues to work its way lower, that will be very good for the market," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "It doesn't mean the market will go straight up, but hopefully we've put in a bottom and we can now work higher."

The Dow Jones industrial average ended up 83.11, or 0.8 percent, at 10,181.74.

The broader gauges also posted gains. The Nasdaq composite index rose 23.83, or 1.3 percent, to 1,860.72. The Standard & Poor's 500 index finished up 8.77, or 0.8 percent, at 1,104.96.

The price of the benchmark 10-year Treasury note rose 116 point. Its yield, which moves in the opposite direction, fell to 4.27 percent from 4.28 percent late Tuesday. The 2-year note fell 116 point to yield 2.47 percent, up from 2.46 percent.

Soaring fuel prices have pressured the market for weeks, with oil topping $49 per barrel last week, a record level. Prices have softened somewhat as anxiety about global supply eased, and a weekly government report showing higher-than-expected gasoline inventories sent them lower still yesterday.

Crude oil for October delivery dropped $1.74, or 3.9 percent, to $43.47 per barrel on the New York Mercantile Exchange. Gasoline futures tumbled 5 percent.

Investors were also pleased by a U.S. Commerce Department report that said orders for costly manufactured goods rose by 1.7 percent in July, an encouraging sign that the economy is shaking off the summer doldrums. But the department found sales of new homes declined by 6.4 percent in July, a far steeper drop than analysts anticipated. The decline left home sales at their lowest level since December. Figures for June were also revised lower.