Posted on: Wednesday, June 29, 2005
Stocks bounce back as oil prices drop $2
By Michael J. Martinez
Associated Press
NEW YORK — Wall Street roared back yesterday, propelling the Dow Jones industrials up 114 points as crude oil prices plunged more than $2 and consumer confidence surged to a three-year high.
In addition, the Conference Board's consumer confidence index rose to its highest level since 2002, and consumers' optimism about the future also rose. That gave the market enough impetus to rebound from last week's oil-driven selling that sliced more than 325 points from the Dow.
"It's good to see the dollar rise. It's good to see oil come down. And it's good to see consumer confidence numbers like this," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
The market's upswing provided some stability going into Thursday, when the Federal Reserve will release its decision on interest rates. Investors hope the Fed will shed light on how long rates will continue to rise, as well as the impact of oil on the economy.
Starting tomorrow with the Fed and stretching through July, investors will be inundated with economic data and second-quarter earnings reports. The upcoming news will likely keep investors on the sidelines until the market can sift through the data and choose a direction.
Advancing issues outnumbered decliners by nearly 5 to 2 on the New York Stock Exchange, where consolidated volume came to 1.81 billion shares, compared with 1.86 billion traded on Monday.
Investors bought up stocks as crude oil, which had closed above $60 per barrel Monday for the first time, fell to $58 amid profit-taking following the recent runup in prices. Light crude settled at $58.20, down $2.34, on the New York Mercantile Exchange.
