Wall Street roared back yesterday, propelling the Dow Jones industrials up 114 points as crude-oil prices plunged more than $2 and consumer...
NEW YORK — Wall Street roared back yesterday, propelling the Dow Jones industrials up 114 points as crude-oil prices plunged more than $2 and consumer confidence surged to a three-year high.
Investors bought up stocks as crude oil, which had closed above $60 per barrel Monday for the first time, fell to $58 amid profit-taking after the recent run-up in prices. Light crude settled at $58.20, down $2.34, on the New York Mercantile Exchange.
The Dow rose 114.85 to 10,405.63.
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Microsoft, one of the 30 Dow stocks, added 2 cents to close at $25.07. Boeing, also a Dow stock, rallied 69 cents to $62.45.
Broader stock indicators also moved sharply higher. The Standard & Poor’s 500 index closed up 10.88 at 1,201.57, and the Nasdaq composite index climbed 24.69 to 2,069.89.
In addition, the Conference Board’s consumer-confidence index rose to its highest level since 2002, and consumers’ optimism about the future also rose. That gave the market enough impetus to rebound from last week’s oil-driven selling that sliced more than 325 points from the Dow.
“The sell-off last week was a little much based on the underlying economic fundamentals,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “Companies were able to make plenty of money over the last two quarters when oil was in the mid-$50s, and consumers will continue to spend money at these levels. It was just overdone, and we’re getting some of it back now.”
The dollar reached an eight-month high against the Japanese yen and rose slightly against the euro. Gold prices fell.
The market’s upswing provided some stability going into tomorrow, when the Federal Reserve will release its decision on interest rates less than two hours before the market closes and the second quarter ends.
Investors hope the Fed will shed light on how long rates will continue to rise, as well as the impact of oil on the economy.
“It’s good to see the dollar rise. It’s good to see oil come down. And it’s good to see consumer-confidence numbers like this,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
“But we still have problems out there that need to be addressed, starting with the Fed. So while we have a nice move higher, it likely won’t last that long.”
Starting tomorrow with the Fed and stretching through July, investors will likely stay to the sidelines as a wave of economic data and second-quarter earnings reports comes through.