MARKET REPORT : Wall Street gains as oil prices ease
Posted on Tuesday, May 13, 2008
NEW YORK — Wall Street rallied Monday as oil prices, supported by a stronger dollar, fell back and alleviated some of investors’ concerns about accelerating inflation.
The Dow Jones industrial average rose 130. 43, or 1. 02 percent, to 12, 876. 31.
The dollar’s advance, a break from the greenback’s long losing streak, also helped soothe some of Wall Street’s worries about inflation’s impact on consumer spending. The dollar’s gain helped send light, sweet crude oil down $ 1. 73 to settle at $ 124. 23 per barrel on the New York Mercantile Exchange. Oil briefly reached a new trading high of $ 126. 40, but investors declined, for the time being at least, to add to oil’s huge gain of nearly $ 10 last week.
“This market does seem to be reacting positively to any sort of easing we see in the energy patch,” said Craig Peckham, market strategist at Jefferies & Co.
Investors also got some encouraging news about the credit crisis from London-based HSBC Holdings PLC, which said its first-quarter profit was up from a year ago although the global banking company took a $ 3. 2 billion write-down on subprime mortgage assets in the United States. The company did echo other assessments that the U. S. was likely to fall into recession this year.
JPMorgan Chase & Co. CEO Jamie Dimon said at a conference Monday that he estimates the credit market crisis is 75 percent over, but that the recession is just beginning.
“This market, after having had a pretty rough last week, is prone to drawing in some more valueseekers,” Peckham said.
Broader stock indicators also rose Monday. The Standard & Poor’s 500 index advanced 15. 30, or 1. 10 percent, to 1, 403. 58, and the Nasdaq composite index rose 42. 97, or 1. 76 percent, to 2, 488. 49.
The Russell 2000 index of smaller companies rose 13. 18, or 1. 83 percent, to 733. 23.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to a light 3. 27 billion shares.
Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3. 80 percent from 3. 78 percent late Friday. The dollar was higher against most other major currencies, while gold prices fell.
Overseas, Japan’s Nikkei stock average rose 0. 64 percent. Britain’s FTSE 100 rose 0. 26 percent, Germany’s DAX index rose 0. 47 percent, and France’s CAC-40 rose 0. 32 percent.
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