Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Tuesday, February 28, 2006

Oil price drop, earnings turn market upbeat

By Michael J. Martinez
Associated Press

NEW YORK Tumbling oil prices and strong earnings from home improvement retailer Lowe's Cos. sent stocks higher yesterday as investors regained their optimism about corporate profits and the health of the economy.

A bullish outlook and better-than-expected fourth-quarter results from Lowe's soothed investors' concerns that earnings would decline as the economy slowed through the year. Lowe's jumped $3.78 to $69.30.

Oil prices tumbled after surging to nearly $63 per barrel Friday, as the response to a foiled attack against a Saudi Arabian processing facility worked through the market. A barrel of light crude settled at $61, down $1.91, on the New York Mercantile Exchange.

Investors have worried that a lasting spike in oil prices could spark inflation.

Analysts noted that yesterday's buying came after the markets turned in a mixed but promising performance last week despite increasing economic uncertainty and the Saudi Arabia attack, which points to strong investor enthusiasm for stocks.

"I think this is one of those times where it's hard to be bearish," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati. "We're still in a market that can easily fall prey to all kinds of intraday activity, up or down, but I think we have room to go higher over the next two to three weeks."

The Dow Jones industrial average rose 35.70, or 0.32 percent, to 11,097.55. Broader stock indexes also rose. The Standard & Poor's 500 index added 4.69 to 1,294.12, and the Nasdaq composite index gained 20.14, to 2,307.18.

Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, on volume of 2.03 billion shares, up from 2.02 billion Friday.