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Oil slide helps give U.S. stocks momentum in light post-holiday trading

Oil slide helps give U.S. stocks momentum in light post-holiday trading

Wall Street rebounded in light post-holiday trading Tuesday as lower oil prices encouraged investors to add to their portfolios in the final days of the year.
Buyers came into the market after major indexes retreated last week with three straight down sessions. However, stocks were range-bound because of thin volume after the Christmas holiday and in the absence of major economic reports.
Oil's slide lent support for the stock markets as investors brushed off concerns about Iran's reaction to United Nation's sanctions over its nuclear program. With crude hovering near $61 a barrel, the prospect of lower gasoline prices was seen propping up consumer spending.
That was welcome news for retailers after reports showed holiday shopping might have been weaker than expected. Early projections of spending between Thanksgiving (Nov. 23) and Christmas showed a disappointing 6.6 percent rise over 2005, according to MasterCard. Sales during the same period last year had climbed 8.7 percent.
Trading volume is expected to remain light this week as many investors are on vacation, which tends to skew price moves and make them appear more dramatic than they perhaps are. European stock markets remain closed for extended Christmas holidays, while stock prices in Tokyo hit a seven-month high.
"We're seeing lower oil prices being a minor catalyst for the market," said Joe Ranieri, managing director of equity trading for Canaccord Adams. "Other than that, you're just seeing a quiet week with added volatility."
The Dow Jones industrial average rose 64.41, or 0.52 percent, to 12,407.63.
Broader stock indicators were also higher. The Standard & Poor's 500 index was up 6.14, or 0.44 percent, at 1,416.90, and the Nasdaq composite index was up 12.33, or 0.51 percent, at 2,413.51.
The advance helped secure the likelihood that all three indexes might finish the year with double-digit gains. The Dow is up 15.8 percent in 2006, the S&P has risen 13.5 percent, and the Nasdaq is up 9.4 percent.
Bonds were little changed, with the yield on the benchmark 10-year bond flat at 4.60 percent from Friday; there were more substantial gains in longer-term Treasuries.
The dollar was mixed against other major currencies, while gold prices rose in response to tensions over Iran.
Neil Massa, a trader with John Hancock Funds, said the market's "moves are mostly energy based." The price of a barrel of light sweet crude dropped $1.31 to $61.10 amid mild winter weather that has depressed demand for home-heating fuels.
Helping to lead the Dow higher was Exxon Mobil Corp., which was awarded a contract by Libya's state-run National Oil Corp.
Dow component Exxon Mobil rose 64 cents to $76.05. Chevron Corp. added 36 cents to $73.09, while ConocoPhillips was up 64 cents at $71.69.
Independent oil and gas producer Anadarko Petroleum Corp. said it plans to sell two gas fields in Louisiana to EXCO Resources Inc. for $1.6 billion (euro1.21 billion). The company is selling assets to cut its debt level after it spend $22.5 billion (euro17.06 billion) earlier this year to buy rivals Kerr-McGee Corp. and Western Gas Resources.
Anadarko rose 56 cents to $42.70.
Gold companies rose along with the price of the metal. Miner Entree Gold Inc. rose 14 cents, or 9.3 percent, to $1.65, while Crystallex International Corp. rose 14 cents, or 3.9 percent, to $3.78.
Shares of miner Freeport-McMoRan Copper & Gold Inc. also rose, gaining 70 cents to $54.54.
Microsoft Corp. rose despite a report from computer security experts that the company's newly released operating system, Windows Vista, contains potentially serious flaws. The stock rose 35 cents to $29.99.
Shares of Goodyear Tire & Rubber Co. gained 40 cents to $20.12 after it reached a tentative deal with the United Steelworkers union to resolve an 11-week dispute over health care and plans to close a factory in Texas.
Telik Inc. shares plunged $11.49, or 71 percent, to $4.77 after the drug company said a late-stage trial of its cancer treatment Telcyta were "extremely disappointing."
E-Trade Financial Corp. rose 2 cents to $22.63 in its last day of trading on the New York Stock Exchange. The discount brokerage will switch back to a listing on the Nasdaq on Wednesday under the stock ticker ETFC.
The Russell 2000 index of smaller companies was up 7.35, or 0.94 percent, at 788.17.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 790 million shares.


Updated : 2021-07-29 05:46 GMT+08:00