US stocks rise as oil price falls

Investors on Wall Street have regained some of their recent swagger, sending stocks higher and the Dow Jones industrials to another record close after oil prices plunged and a drop in jobless claims indicated the US economy was not slowing too quickly.

Trading stood in sharp contrast to recent sessions in which investors made small bets as they wrestled with whether stocks would eventually push higher with the same vigour as in 2006.

Economic data, such as new unemployment figures, and oil prices, which have fallen for four days in a row, have drawn the market's attention as investors try to piece together where Wall Street is headed.

Strength in employment indicated the US economy was holding up well as it slowed. However, investors want the economy to give off some signs of gradual slowdown in order to wring a cut in interest rates from the Federal Reserve.

"The markets had a very strong run in the fourth quarter and we have spent the first week and a half consolidating those gains," said Steven Goldman, chief market strategist at Weeden & Co. He said stocks remained "in a pretty good period", as with 2006.

The Dow Jones industrial average rose 72.82, or 0.59%, to 12,514.98, topping the previous record close of by 4.01 points.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 8.97, or 0.63%, to 1,423.82, and the Nasdaq composite index advanced 25.52, or 1.04%, to 2,484.85.

Bonds fell sharply as the drop in jobless claims pointed to a healthy economy and stirred some concerns that the Fed might not lower rates.

The Russell 2000 index of smaller companies rose 9.58, or 1.23%, to 788.45.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume totalled 1.67 billion shares compared with 1.57 billion traded on Wednesday.