Oil price surge boosts Dow

Wall Street rebounded today, rising moderately as crude oil surged more than two dollars a barrel and triggered a rally among energy producers.

Investors regained their optimism about corporate profits after a series of positive earnings reports.

Energy prices spiked after the Energy Secretary Samuel Bodman said the US will double the size of the nation's Strategic Petroleum Reserve. Prices were already rising as a cold snap in the northeast of the country was seen increasing demand for heating fuels in the region.

Exxon Mobil led blue chips and was among the Dow Jones industrials' biggest gainers, while fellow refiners ConocoPhillips and Chevron also surged during the session.

The markets also got a lift from robust earnings reports from United Technologies and Texas Instruments. This helped offset a warning from telecommunications equipment maker Alcatel-Lucent that it would not post a profit during the fourth quarter because of a steep decline in sales.

The Dow rose 56.64, or 0.45%, to 12,533.80. Broader stock indicators also advanced. The Standard & Poor's 500 index was up 5.04, or 0.35%, at 1,427.99, and the Nasdaq composite index added 0.34, or 0.01 %, to 2,431.41.

Bond prices fell, with the yield on the benchmark 10-year Treasury note rising to 4.81% from 4.76% last night.

In economic news, a Richmond Fed Survey showed a slip in its manufacturing index this month. Meanwhile, the Conference Board said US economic activity is set to increase slightly in the coming months.

The dollar was mixed against other major currencies, while gold prices spiked. A barrel of light, sweet crude rose $2.47, or 4.7%, to settle at $55.04 on the New York Mercantile Exchange.

As has been typical in previous sessions, oil companies got a boost on the rebound in crude prices. The refiners stand to benefit if the government expands its reserves.

Exxon Mobil rose 1.59, or 2.2%, to 74.49; ConocoPhillips was up 1.59, or 2.9%, at 64.97; and Chevron increased 1.34 to 72.88.

This helped investors shake off Alcatel-Lucent’s statement that it will post a loss for the first full quarter since combining in last year’s 11.6bn (€8.9bn) deal between France’s Alcatel and Lucent of the US. The company blamed integration costs and weaker sales because of consolidation among its customers.

Alcatel-Lucent fell 1.04 dollars, or 7.3%, to 13.15. Rival Tellabs fell 7 cents to 9.95 after reporting a plunge in sales caused profits to fall 68% during the latest quarter.

However, technology stocks were up overall after chip maker Texas Instruments reported a robust quarterly profit and was upgraded by several Wall Street firms. Shares rose 1.01, or 3.5%, to 29.60 dollars.

United Technologies, which makes everything from air conditioners to aircraft engines, reported fourth-quarter profits rose 38%, which sent shares up 2.05, or 3.2%, to 66.14.

Bank of America fell 33 cents to 53.32 despite the nation’s biggest retail bank saying growth in its loan business and its acquisition of credit-card issuer MBNA helped boost profit during the latest quarter. Rival Wachovia shares rose 38 cents to 56.65 after reporting better-than-expected results.

DuPont posted higher quarterly earnings that met Wall Street forecasts, but investors were concerned about how the impact of higher raw materials costs will impact the chemical maker. Its stock fell 43 cents to 49.67.

The Russell 2000 index of smaller gained 7.42, or 0.95%, to 785.38.