Oil settles at $114, pushing stocks up

By Tim Paradis
Associated Press

NEW YORK » Stocks ended higher yesterday but well off their peak after crude oil prices pulled off their lows and the Federal Reserve said more banks are tightening lending standards.

Light, sweet crude fell 75 cents to settle at $114.45 per barrel on the New York Mercantile Exchange after dipping to $112.72, its lowest price since early May.

The Fed's report reminded investors that the nation's credit situation is still deeply troubled. The central bank said about 75 percent of the banks it surveyed in July had increased requirements for prime mortgages, up from about 60 percent in April. The tighter standards can make it more expensive and difficult for borrowing that could stimulate the economy.

The Dow Jones industrial average rose 48.03, or 0.41 percent, to 11,782.35, after being up more than 130 points. The gains yesterday follow the blue chips' 300-point jump Friday.

Broader stock indicators also advanced yesterday. The Standard & Poor's 500 index rose 9.00, or 0.69 percent, to 1,305.32. The Nasdaq composite index rose 25.85, or 1.07 percent, to 2,439.95, after names like Amazon.com Inc. jumped $7.58, or 9.4 percent, to $88.09 following release of upbeat comments from analysts.

Other consumer discretionary stocks rose as investors saw the drop in oil as likely to leave more cash consumers' wallets.

Target Corp. rose $2.49, or 5.1 percent, to $51.23, while Starbucks Corp. rose $1.18, or 7.8 percent, to $16.30.

Advancing issues outnumbered decliners by about 5 to 3 on the New York Stock Exchange, where volume came to a light 1.26 billion shares compared with 1.25 billion Friday. Light trading can exacerbate the market's moves.

The Russell 2000 index of smaller companies rose 16.76, or 2.28 percent, to 751.06.

The dollar, whose recent strength has helped drive oil lower, was mostly higher yesterday against other major currencies. Gold prices fell.

Bond prices fell sharply as traders again transferred money to the stock market. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.01 percent from 3.94 percent late Friday.

In corporate news, Waste Management Inc. said it was increasing its buyout bid for rival Republic Services by 9 percent to $37 per share. The nation's largest trash hauler is willing to pay about $6.99 billion for Republic Services, which rejected an offer of $6.19 billion, or $34 a share, in July. Waste Management rose 10 cents to $36.11, while Republic rose 19 cents to $35.05.

Calpine Corp. rose 61 cents, or 3.8 percent, to $16.60 after the power producer said it swung to a profit in the second-quarter from a loss a year earlier following an increase in electricity rates and lower costs.

Wall Street seemed unfazed by a pullback in China's benchmark Shanghai Composite Index, which fell 5.2 percent yesterday after economic figures showed wholesale price inflation jumped to its highest level in 12 years in July.

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