With all eyes on oil,
Dow climbs back
above 10,000
By Meg Richards
Associated Press
NEW YORK » Stocks rebounded yesterday, with the Dow Jones industrial average rising solidly above 10,000 as investors, less anxious about volatile energy prices, focused instead on good corporate news.
Light crude for November delivery surged above the psychologically important $50 milestone early in the session, but backed off that record high after Saudi Arabia indicated it would raise its output if necessary.
Nervous about rising energy costs, investors had turned to the safety of Treasury bonds lately, but with the third quarter drawing to a close and oil prices easing, they seemed ready to return to stocks -- especially after several sessions of equity declines.
"All attention is definitely being paid to oil today, and the fact that it's trading off its highs is definitely helping equities," said Brian Williamson, an equity trader at the Boston Company Asset Management. "You can definitely make a correlation today between the bond market selling off ... and the momentum in U.S. equities."
The Dow Jones industrial average closed up 88.86, or 0.9 percent, at 10,077.40.
The broader gauges also posted gains. The Standard & Poor's 500 index added 6.54, or 0.6 percent, to 1,110.06. The Nasdaq composite index added 9.99, or 0.5 percent, to 1,869.87.
In economic news, consumer confidence declined for a second straight month, according to the Conference Board. The index fell 1.9 points to 96.8 from a revised reading of 98.7 in August. Analysts had expected a reading of 99.5. Economists blamed the decline on soft labor market conditions.
Moderating crude prices, a Saudi Arabian oil official said his country would raise its daily production capacity by 15 percent in an effort to calm the market. The move essentially allows the world's largest petroleum exporter to raise production at will, depending on demand.
Oil prices remained quite volatile, however, as increased fighting in Nigeria forced several companies to shut down production and evacuate workers. Rebels in Nigeria, the world's seventh-largest crude exporter, are battling for control of the nation's southern oil fields. Light, sweet crude for November delivery settled at a new high, up 26 cents at $49.90.
Analysts are largely upbeat about the market's underlying fundamentals, but given all the uncertainties surrounding energy costs, the jobs picture, the upcoming presidential election and persistent terror fears, few were convinced the upward move would last.
"If this rally didn't hold today, it wouldn't surprise me at all. I just can't imagine a lot of people getting really enthused right now, saying 'Gee, oil is near $50 a barrel, confidence is down, let's go buy some stocks,"' said Scott Wren, equity strategist for A.G. Edwards & Sons.
Google Inc. rose 7.3 percent, or $8.60, to $126.86, after several brokerage firms initiated coverage of the stock with high expectations, including Credit Suisse First Boston and J.P. Morgan.
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