US stocks go higher

US stocks rebounded today, with the Dow Jones industrial average rising solidly above 10,000 as investors, less anxious about volatile energy prices, focused instead on good corporate news.

Light crude for November delivery surged above the psychologically important 50 milestone early in the session, but backed off that record high after Saudi Arabia indicated it would raise its output if necessary.

Investors, nervous about rising energy costs, had turned to the safety of Treasury bonds lately, but with the third quarter drawing to a close and oil prices easing, they seemed ready to return to stocks – especially after several sessions of equity declines.

“All attention is definitely being paid to oil today, and the fact that it’s trading off its highs is definitely helping equities,” said Brian Williamson, an equity trader at The Boston Company Asset Management. “You can definitely make a correlation today between the bond market selling off … and the momentum in US equities.”

The Dow Jones industrial average closed up 88.86, or 0.9%, at 10,077.40.

The broader gauges also posted gains. The Standard & Poor’s 500 index added 6.54, or 0.6%, to 1,110.06. The Nasdaq composite index added 9.99, or 0.5%, to 1,869.87.

In economic news, consumer confidence declined for a second straight month, according to the Conference Board. The index fell 1.9 points to 96.8 from a revised reading of 98.7 in August.

Analysts had expected a reading of 99.5. Economists blamed the decline on soft labour market conditions.

Moderating crude prices, a Saudi Arabian oil official said his country would raise its daily production capacity by 15% in an effort to calm the market. The move essentially allows the world’s largest petroleum exporter to raise production at will, depending on demand.

Oil prices remained quite volatile, however, as increased fighting in Nigeria forced several companies to shut down production and evacuate workers. Rebels in Nigeria, the world’s seventh-largest crude exporter, are battling for control of the nation’s southern oil fields. Light, sweet crude for November delivery settled up 26 cents at 49.90.

Lowe’s Cos gained 33 cents to 53.76 after the home improvement retailer reiterated its earnings projections for the quarter and the year, and issued a bright forecast through 2006 based on an expectation of robust sales growth next year.

Chipmaker Cypress Semiconductor was down 29 cents at 8.60 after warning that lower-than-expected revenues would lead to a third-quarter loss on weakening demand and sluggish business improvement.

Google rose 7.3%, or 8.60, to 126.86, after several brokerage firms initiated coverage of the stock with high expectations, including Credit Suisse First Boston and JP Morgan.

Starbucks added 20 cents to 44.58 after saying it would raise the average price of its beverages by 11 cents at its 4,500 stores across North America because of increases in the cost of coffee and sugar.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange.

The Russell 2000 index, which tracks smaller company stocks, was up 7.30, or 1.3%, at 565.66.