Falling oil prices
push stocks higher

NEW YORK » A late-session rally fed by falling oil prices pushed stocks higher yesterday, although Wall Street's mood remained tentative amid uncertainty about the economy.

The drop in oil prices -- coming as the U.S. government reported a larger-than-expected stockpile of oil and gasoline -- removed a key obstacle for stocks to move higher. A barrel of light crude settled at $50.45, down $1.62, on the New York Mercantile Exchange.

The news about the trade deficit, which shrank to its lowest level in six months, also encouraged investors who had feared an economic slowdown. However, Michael Murphy, managing director at Wachovia Securities in Baltimore, noted that while the day's economic and corporate news was generally good, news of late has been mixed, and most buyers are waiting for a clear signal to get into the market.

"People are very hesitant right now to pull the trigger," Murphy said.

The Dow Jones industrial average rose 19.14, or 0.19 percent, to 10,300.25.

Broader stock indicators also moved higher. The Standard & Poor's 500 index was up 4.89, or 0.42 percent, at 1,171.11, and the Nasdaq composite index gained 8.78, or 0.45 percent, to 1,971.55.

Stocks took a sharp dive around midday after the White House and Capitol were evacuated due to an off-course aircraft. Once the plane was successfully diverted away from Washington, the major indexes began to slowly move higher.

Contributing to investors' uncertainty were comments by Federal Reserve Bank of St. Louis President William Poole, a member of the Fed's rate-setting committee. He was quoted by Dow Jones Newswires as saying the Fed's stated intent to raise rates at a measured pace "should not be viewed as an iron clad commitment."

The statement, while nuanced, raised the specter of stagflation, a situation in which inflation rises even as economic growth starts to slow, and which could still force the Federal Reserve to raise interest rates.

The Commerce Department reported that the nation's trade deficit fell sharply in March as U.S. exports climbed to an all-time high, good news for exporting companies. The surge of textile shipments from China slowed. The deficit narrowed by 9.2 percent to $54.99 billion, down from the record monthly deficit of $60.57 billion set in February.

Late Tuesday, Cisco Systems reported earnings for the latest quarter, excluding special items, of $1.5 billion, or 23 cents per share, beating Wall Street analysts' expectations by a penny a share.