Stocks soar after another drop in oil prices

Tue Jul 22, 2008 8:38 PM EDT
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NEW YORK — Wall Street shot higher Tuesday, 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 rose 266 points.

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 E. Cripps, chief market strategist for Stifel Nicolaus.

A stock bounce was hardly unexpected, though, after the Dow lost nearly 240 points Monday on worries about the sagging financial sector. Wall Street is torn: Energy prices, if they continue on their downward path, could provide big relief to consumers and in turn help the economy, 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 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 & Co. 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.

The Dow gained 266.48, or 2.39 percent, to 11,397.56.

Broader stock indicators also climbed. The Standard & Poor's 500 index rose 28.83, or 2.34 percent, to 1,263.20, and the Nasdaq composite index rose 55.40, or 2.45 percent, to 2,319.62.

The Dow and the S&P are now less than 20 percent below their Oct. 9 record peaks — technically out of bear market territory. The Nasdaq is less than 19 percent below its Oct. 31 peak. Still, another downturn will put the market back into bear territory, and some analysts would call an advance like Tuesday's a bear market rally.

Advancing issues outnumbered by nearly 4 to 1 on the New York Stock Exchange. Consolidated volume came to a moderate 5.11 billion shares, up from 4.16 billion shares Monday.

Bond prices fell after advancing a day earlier. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.04 percent from 4.01 percent late Monday.

The dollar was mostly higher against other major currencies, while gold prices fell.

Merrill, which plans to issue new stock to raise $8.5 billion, initially saw its stock drop. But shares later rallied to finish up $1.92, or 8 percent, at $26.25.

Most other financial stocks also bounced higher. Citigroup Inc. rose $1.03, or 5.9 percent, to $18.46; Washington Mutual Inc. rose 46 cents, or 11.7 percent, to $4.40; Bank of America Corp. rose $3.97, or 14.2 percent, to $32.03; and Wachovia Corp. rose $1.98, or 14.5 percent, to $15.61.

Airline stocks also jumped due to slumping oil prices. AMR Corp., the parent of American Airlines, rose $1.47, or 18.4 percent, to $9.47; Delta Air Lines Inc. rose $1.01, or 14.6 percent, to $7.91; and United parent UAL Corp. rose $1.50, or 21.4 percent, to $8.51.

Better-than-expected quarterly earnings helped shore up sentiment as well.

United States Steel Corp.'s profit more than doubled in the second quarter following an increase in demand and pricing. The stock jumped $20.43, or 14 percent, to $165.76.

Colgate-Palmolive rose $5.59, or 8.2 percent, to $74.15 after reporting that its second-quarter earnings rose 19 percent. Price increases helped the consumer products company offset rising input costs.

But on the downside, there was more data pointing to a still sinking housing market. S&P/Case-Shiller said its 20-city index for May fell 15.8 percent from a year earlier — the sharpest drop since its inception in 2000. The narrower 10-city index is down 16.9 percent, the biggest decline in its 21-year history.

The Russell 2000 index of smaller companies rose 18.44, or 2.65 percent, to 714.55.

Overseas, Japan's Nikkei stock average fell 1.46 percent. Britain's FTSE 100 rose 0.12 percent, Germany's DAX index rose 0.75 percent, and France's CAC-40 dipped 0.09 percent.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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{"commentId":2262496,"authorDomain":"forrestpettis"}
Washington-365317

The United States is self sufficient in energy resources, put simply and succinctly; it does not need the rest of the planet to survive. It can remain isolationist and free from the outside influence and contamination of the rest of the planet. We do not need to meddle in the affairs of the geopolitics of energy development, we are already self-sufficient, we, also have alternative energy resources at our disposal. We are being manipulated by outside influences, who do not concern themselves with our best interest, in fact, they are using our best assets, our children, as cannon fodder, in useless no-win wars, from which we are made weaker and unstable as a nation-state. We need to reevaluate what our best interests really are, and then plan our work accordingly, to remain and to retain 'sovereignty' from the manipulation of those outside influences. America please wake up!

The Energy Non-Crisis by Lindsay Williams, is an eye-witness account of the deliberate curtailment of the flow of oil from Alaska to the United States and down to the lower forty-eight states. Lindsay Williams gives a firsthand account of his experiences while a chaplain of the Alyeska Pipeline Company (), which is what the Alaskan pipeline builder was called.

This is probably the most important information regarding the direct influence of the banking fraternity on the actual energy development strategy that they have proposed for the entire planet. They have taken it upon themselves to determine the energy policy of the entire planet. With this piece of information, we now know first hand that the 'banking fraternity' has a direct influence on the energy strategy of every single nation on planet Earth. The question is WHY? But more importantly, why the deception?

If you are interested, meet and get to know Lindsay Williams ()

The answer is simple: We do not have an energy problem. We have a political problem ()

You can read Lindsay William's account from his on-line book:
The Energy Non-Crisis by Lindsay Williams

Or you can view the online film of Lindsay Williams discussing this fact:

The Energy Non-Crisis [ Part 1 of 8 ] Video

The Energy Non-Crisis [ Part 2 of 8 ] Video

The Energy Non-Crisis [ Part 3 of 8 ] Video

The Energy Non-Crisis [ Part 4 of 8 ] Video

The Energy Non-Crisis [ Part 5 of 8 ] Video

The Energy Non-Crisis [ Part 6 of 8 ] Video

The Energy Non-Crisis [ Part 7 of 8 ] Video

The Energy Non-Crisis [ Part 8 of 8 ] Video

According to Lindsay Williams, the author of The Non-Energy Crisis, our energy problems are a deliberate policy of The World Bank and The International Monetary Fund. Speaking as an eye-witness, he states that there is a deliberate policy of lowering the standard of living of all United States citizens, by raising the price of oil/gas to $5.00 per gallon, and that this then becomes a hidden tax that is then transferred to other nations via the World Bank. [View the videos]. Oil has become a weapon of equalizing the masses globally, and the elimination of the 'middle' classes everywhere.

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How Large Is Prudhoe Bay?

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We are being lied to, on a massive (deliberate) scale: read the Energy Information below, and look at the linked references for actual data verifying this:

Energy Information () is too important to ignore. Don't you agree?
Specific Energy Suppression Cases by Gary Vesperman

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