Lower oil prices drive Dow past 11,000

A drop in oil prices below £60 a barrel sent stocks soaring today, carrying the Dow Jones industrial average 136 points higher and past 11,000 for the first time in a month.

A surge in retail sales added to the market’s good mood.

“Oil below $60 a barrel grabbed folks’ attention,” said Bob Sitko, who manages more than $500m (€419.6m) as a lead portfolio manager with USAA Private Investment Management.

”When the market decides to pay attention to things is a bit of Rubik’s cube, but this is a big deal.”

Other analysts attributed some of the rise to sheer momentum, as Wall Street initially had a muted reaction to oil’s decline and the pickup in retail sales.

“It’s sort of what other people think other people are doing,” said Sandy Lincoln, Chief Market Strategist, Wayne Hummer Investments.

“You get this momentum buying and it could move the market pretty high, pretty quickly. (But) it could go the other way tomorrow.”

The market seemed to shed completely Monday’s torpor, when investors sent shares lower as they worried about new Federal Reserve chairman Ben Bernanke’s remarks before Congress on Wednesday, his first appearance on Capitol Hill as Fed chairman.

The Dow rose 136.07, or 1.25%, to 11,028.39, its first foray past 11,000 since January 12.

Broader stock indicators also closed sharply higher. The Standard & Poor’s 500 index rose 12.67, or 1%, to 1,275.53, and the Nasdaq composite index rose 22.36, or 1%, to 2,262.17.