Wall Street rallied today as oil prices, supported by a stronger dollar, fall back and alleviate some of investors’ concerns about accelerating inflation.
The dollar’s advance, a break from the greenback’s long losing streak, also helped soothe some of Wall Street’s worries about inflation’s impact on consumer spending.
The Dow rose 130.43, or 1.02%, to 12,876.31.
Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 15.30, or 1.10%, to 1,403.58, and the Nasdaq composite index rose 42.97, or 1.76%, to 2,488.49.
Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.80% from 3.78% on Friday. The dollar was higher against most other major currencies, while gold prices fell.
The flow of first-quarter earnings reports is beginning to dwindle, so Wall Street will probably require some big news on the US economy – such as a sharp reversal in commodities prices – to dislodge the markets from their current position, said Ted Oberhaus, director of equity trading at Lord, Abbett & Co.
“We’re the majority of the way through the earnings season and it has been relatively productive. With that as a backdrop, I would expect a range-driven appreciation over the next few months,” Oberhaus said.
Hewlett Packard fell 2.49, or 5.1%, to 46.64 after the technology company confirmed it was in talks with Electronic Data Systems about a possible combination. Shares of EDS spiked 5.27, or 28%, at 24.13.
MBIA posted a 2.41 billion first-quarter loss, as the struggling bond insurer took heavy charges to write down the value of liabilities amid continued deterioration in the credit markets. The stock rose 47 cents, or 5%, to 9.90 following comments from the company on the strength of its balance sheet.
Research In Motion rose 8.93, or 6.7%, to 141.70 as the handheld electronics maker introduced its first major new BlackBerry model in more than a year.
Investors will be looking to other readings on consumers this week to determine the toll rising energy costs might be having. Government figures are due on retail sales in April. And retailers including Wal-Mart Stores, Macy’s, JCPenney Co. and Kohls are due to report first-quarter results.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume totalled a light 908.5 million shares.
The Russell 2000 index of smaller companies rose 13.18, or 1.83%, to 733.23.