Revived dollar helps
push stocks upward

NEW YORK » Investors resumed their December rally yesterday, looking past higher oil prices and focusing instead on building up their portfolios before year's end. A higher U.S. dollar and a brokerage upgrade of General Electric Co. added momentum to the buying.

Although a barrel of light crude oil closed at $41.94, up 48 cents, on the New York Mercantile Exchange, Wall Street appeared unconcerned. Oil futures had vacillated between $41 and $42 per barrel after the Energy Department said fuel inventories were higher than Wall Street expected.

Wall Street was encouraged as the dollar gained against the Japanese yen after Japan's government reported slower-than-expected economic growth in its most recent quarter. Economists had been concerned that the weak dollar could lead to a drop in foreign investment.

Analysts said investors were more interested in end-of-the-year window dressing in their portfolios.

"There's just a ton of money coming into the market, and some of the usual year-end shuffling, and it's ignoring the day-to-day ups and downs on oil and everything else," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "I think the pullback we had over the past few days is good, because it'll help us move higher before the year's out."

The Dow Jones industrial average rose 53.65, or 0.51 percent, to 10,494.23. The Dow had fallen more than 150 points over the previous two sessions.

Broader stock indicators were moderately higher. The Standard & Poor's 500 index was up 5.74, or 0.49 percent, at 1,182.81, and the Nasdaq composite index gained 11.45, or 0.54 percent, to 2,126.11.

Analysts reported more money flowing into mutual funds and other investments thanks to the stock rally that started in November. The extra money should push stock prices up before the end of the year, so long as oil prices stay relatively low and there are no negative surprises in earnings forecasts or economic data.

"I've been saying for the past half a year that things would pick up after the election, and they did. I still think that works, even with what we've seen this week," said Brian Bruce, director of global investments, PanAgora Asset Management Inc. in Boston.

Despite a disappointing earnings forecast, Merck & Co. made strong gains yesterday. The drug maker warned that its 2005 profits would be lower than analysts expected due to the withdrawal of its Vioxx arthritis drug from the market earlier this year.