Wall Street rebounds in post-Christmas trading

Wall Street rebounded in light trading today as lower oil prices encouraged investors to add to their portfolios in the final days of the year.

Buyers came into the market after major indices retreated last week with three down sessions in a row. However, stocks were range-bound because of thin volume after Christmas and in the absence of major economic reports.

Oil’s slide lent support for the stock markets as investors brushed off concerns about Iran’s reaction to United Nations sanctions over its nuclear programme. With crude hovering near $61 a barrel, the prospect of lower petrol prices was propping up consumer spending.

This was welcome news for retailers after reports showed Christmas shopping might have been weaker than expected.

Early projections of spending between Thanksgiving (November 23) and Christmas showed a disappointing 6.6% rise over 2005, according to MasterCard. Sales during the same period last year climbed 8.7%.

Trading volume is expected to remain light this week as many investors are on holiday, which tends to skew price moves and make them appear more dramatic than they perhaps are.

European stock markets remained closed for St Stephen's Day, while stock prices in Tokyo hit a seven-month high.

“We’re seeing lower oil prices being a minor catalyst for the market,” said Joe Ranieri, managing director of equity trading for Canaccord Adams. “Other than that, you’re just seeing a quiet week with added volatility.”

The Dow Jones industrial average rose 64.41, or 0.52% to 12,407.63.

Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 6.14, or 0.44%, at 1,416.90, and the Nasdaq composite index was up 12.33, or 0.51%, at 2,413.51.