Oil's plunge powers rally on Wall St
* Oil slides more than US$5, falls below US$115/barrel
* Three major US indexes up more than 2%
* For the week, Dow up 3.6%, S&P 500 up 2.9%, Nasdaq up 4.5%
* Fannie Mae posts 4th straight quarterly loss
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NEW YORK - US stocks soared on Friday rounding out their best week in more than three months, as oil plunged below US$115 a barrel, easing inflation concerns and improving prospects for business and consumer spending.
The slide in oil prices to their lowest level in three months powered the biggest rally in retailing shares in six years, with Home Depot gaining 7.7 per cent.
That eclipsed a steeper-than-expected quarterly loss from mortgage finance company Fannie Mae.
In fact, financials rallied, helped by the view that lower inflation will make it easier for the Federal Reserve to put off interest-rate increases, at a time when the financial sector is still struggling with tighter credit conditions.
'We're at the lowest level in oil prices in months and there is a real feeling that the trend has turned,' said Al Kugel, chief investment strategist at Atlantic Trust.
'Lower oil prices are good for businesses and good for consumers, for the inflation picture, and they will improve growth somewhere down the line. So it's 'win win.'
The Dow Jones industrial average rose 302.89 points, or 2.65 per cent, to 11,734.32, while the Standard & Poor's 500 Index jumped 30.25 points, or 2.39 per cent, to 1,296.31. The Nasdaq Composite Index gained 58.37 points, or 2.48 per cent, to 2,414.10.
For the week, the Dow gained 3.6 per cent, the S&P 500 advanced 2.9 per cent and the Nasdaq shot up 4.5 per cent. It was the best week for all three indexes since April 20.
McDonald's Corp gave the biggest boost to the Dow after its July sales beat Wall Street's forecasts as its key US market posted its largest gain in five months. Shares of the world's largest fast-food chain rose to an all-time high of US$66.24. At the close, McDonald's stock was up 6.2 per cent at US$65.67 on the New York Stock Exchange (NYSE).
Concerns about slowing European and Asian economies boosted the dollar and fed worries about lower demand for oil.
US front-month crude dropped more than US$5 in post-settlement trading to US$114.62 a barrel - more than 20 per cent below its July record high.
Home Depot rose 7.7 per cent to US$26.37, while an index of retail stocks rose 6.2 per cent. The decline in fuel costs brightens the outlook for sales as it leaves consumers with more money to spend shopping.
General Electric shares rose 3.8 per cent to US$29.64 while Procter & Gamble gained 3.2 per cent to US$69.63.
Shares of Microsoft climbed 2.7 per cent to US$28.13 and Cisco Systems rose 2.8 per cent to US$24.25, signalling optimism about business spending.
An index of airline stocks, particularly sensitive to higher fuel costs, surged 8.1 per cent.
Apple shares rose 3.7 per cent to US$169.55 and gave the biggest boost to the Nasdaq, after a Credit Suisse analyst said in a note to investors that he sees solid growth for the Apple 3G iPhone 'driven notably by its evolving economics - iPhone now unlocked, greater subsidies leading to lower retail price and no geographic exclusivity.'
Shares of MBIA spurred gains in the financial sector after the world's largest bond insurer posted a higher-than-expected quarterly profit, helped by an accounting change that turned credit problems into a big gain. MBIA's shares rose 3.5 per cent to US$8.57.
But shares of Fannie Mae dropped 9.1 per cent to US$9.05 after the company posted a fourth straight quarterly loss and slashed its dividend by more than 85 per cent to conserve capital.
Trading volume was low on the NYSE, with about 1.24 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.23 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by three to one on the NYSE and by two to one on the Nasdaq. -- REUTERS
* Oil slides more than US$5, falls below US$115/barrel
* Three major US indexes up more than 2%
* For the week, Dow up 3.6%, S&P 500 up 2.9%, Nasdaq up 4.5%
* Fannie Mae posts 4th straight quarterly loss
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>NEW YORK - US stocks soared on Friday rounding out their best week in more than three months, as oil plunged below US$115 a barrel, easing inflation concerns and improving prospects for business and consumer spending.
The slide in oil prices to their lowest level in three months powered the biggest rally in retailing shares in six years, with Home Depot gaining 7.7 per cent.
That eclipsed a steeper-than-expected quarterly loss from mortgage finance company Fannie Mae.
In fact, financials rallied, helped by the view that lower inflation will make it easier for the Federal Reserve to put off interest-rate increases, at a time when the financial sector is still struggling with tighter credit conditions.
'We're at the lowest level in oil prices in months and there is a real feeling that the trend has turned,' said Al Kugel, chief investment strategist at Atlantic Trust.
'Lower oil prices are good for businesses and good for consumers, for the inflation picture, and they will improve growth somewhere down the line. So it's 'win win.'
The Dow Jones industrial average rose 302.89 points, or 2.65 per cent, to 11,734.32, while the Standard & Poor's 500 Index jumped 30.25 points, or 2.39 per cent, to 1,296.31. The Nasdaq Composite Index gained 58.37 points, or 2.48 per cent, to 2,414.10.
For the week, the Dow gained 3.6 per cent, the S&P 500 advanced 2.9 per cent and the Nasdaq shot up 4.5 per cent. It was the best week for all three indexes since April 20.
McDonald's Corp gave the biggest boost to the Dow after its July sales beat Wall Street's forecasts as its key US market posted its largest gain in five months. Shares of the world's largest fast-food chain rose to an all-time high of US$66.24. At the close, McDonald's stock was up 6.2 per cent at US$65.67 on the New York Stock Exchange (NYSE).
Concerns about slowing European and Asian economies boosted the dollar and fed worries about lower demand for oil.
US front-month crude dropped more than US$5 in post-settlement trading to US$114.62 a barrel - more than 20 per cent below its July record high.
Home Depot rose 7.7 per cent to US$26.37, while an index of retail stocks rose 6.2 per cent. The decline in fuel costs brightens the outlook for sales as it leaves consumers with more money to spend shopping.
General Electric shares rose 3.8 per cent to US$29.64 while Procter & Gamble gained 3.2 per cent to US$69.63.
Shares of Microsoft climbed 2.7 per cent to US$28.13 and Cisco Systems rose 2.8 per cent to US$24.25, signalling optimism about business spending.
An index of airline stocks, particularly sensitive to higher fuel costs, surged 8.1 per cent.
Apple shares rose 3.7 per cent to US$169.55 and gave the biggest boost to the Nasdaq, after a Credit Suisse analyst said in a note to investors that he sees solid growth for the Apple 3G iPhone 'driven notably by its evolving economics - iPhone now unlocked, greater subsidies leading to lower retail price and no geographic exclusivity.'
Shares of MBIA spurred gains in the financial sector after the world's largest bond insurer posted a higher-than-expected quarterly profit, helped by an accounting change that turned credit problems into a big gain. MBIA's shares rose 3.5 per cent to US$8.57.
But shares of Fannie Mae dropped 9.1 per cent to US$9.05 after the company posted a fourth straight quarterly loss and slashed its dividend by more than 85 per cent to conserve capital.
Trading volume was low on the NYSE, with about 1.24 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.23 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by three to one on the NYSE and by two to one on the Nasdaq. -- REUTERS
