Wall Street shot higher today, gaining back the previous session's sharp losses and then some, after a drop in oil prices and a rise in...
NEW YORK — Wall Street shot higher today, gaining back the previous session’s sharp losses and then some, after a drop in oil prices and a rise in consumer confidence gave investors some hope for a letup in Americans’ financial woes.
The Dow Jones industrial average gained 266.48, or 2.4 percent, to 11,397.56.
Microsoft, one of the 30 Dow stocks, rose 61 cents to close at $26.11 a share. Boeing, also a Dow stock, gained 87 cents to $63.21.
Broader stock indicators also climbed. The Standard & Poor’s 500 index rose 28.83, or 2.3 percent, to 1,263.20, and the Nasdaq composite index rose 55.40, or 2.5 percent, to 2,319.62.
Most Read Business Stories
- 6 Dr. Seuss books won't be published for racist images
- Frontier cancels flight, citing maskless passengers
- Biden vows enough vaccine for all US adults by end of May
- Amazon sued by Black cloud-computing manager over alleged racial discrimination and sexual harassment
- Texas becomes biggest US state to lift COVID-19 mask mandate
Crude oil prices sank $2.54 to $122.19 a barrel on the New York Mercantile Exchange, extending their two-week-long retreat from record highs above $147.
The prospect of lower energy costs for U.S. consumers, along with a modest uptick in the Conference Board’s July index of consumer confidence to 51.9 from 51 in June, came as welcome news. Consumer spending accounts for more than two-thirds of U.S. economic activity.
“The thinking is that oil prices are heading lower, and that’s obviously a positive for the market,” said Richard Cripps, chief market strategist for Stifel Nicolaus.
After the Dow lost nearly 240 points on Monday, Wall Street is torn: Energy prices, if they continue on their downward path, could provide big relief to consumers, but credit losses keep mounting at the nation’s major banks. The result is big swings in the market but little consistent direction.
“We’re living from one piece of news to the next,” said Alan Gayle, senior investment strategist for RidgeWorth Capital Management. The market’s volatility, exacerbated by light summer trading volumes, is likely to continue unless it gets further evidence that oil prices are, indeed, on their way down, and that banks have already seen the bulk of their losses.
In a sign that there could be additional asset markdowns for banks, Merrill Lynch announced late Monday that it was writing down another $5.7 billion and selling assets tied to risky debt at a steep discount to Lone Star Funds, a distressed debt investor.
Still, Merrill’s moves at least answered lingering questions about the health of the brokerage’s balance sheet. And many analysts said the asset sale could help to finally establish a market for all the hard-to-value securities held by various financial institutions.
“The bad news is, there’s going to be write-downs. The better news is, we can estimate those write-downs with better clarity,” Gayle said.