Stocks Rally As Oil Continues To Drop

Dow Jones Climbs 200 Points, Surpassing Initial Expectations For Market Boost

(CBS/ AP)  Wall Street shot higher Thursday, extending its rally into a second session as tumbling energy prices bolstered an already upbeat mood that followed stronger-than-expected quarterly reports from big names like JPMorgan Chase and United Technologies. The Dow Jones industrial average rose more than 200 points, bringing their two-day advance to more than 480.

Investors got a double dose of good news after weeks of angst about the economy. Light, sweet crude fell $5.31 to settle at $129.29 a barrel; oil has dropped more than $15 in just the past three sessions. And early Thursday, three components of the Dow industrials - JPMorgan Chase & Co., United Technologies Corp. and Coca-Cola Co. - issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions.

The reports let investors put aside some of their worst fears about the economy. Still, Wall Street has had some up periods in the past few months as optimism grew - only to fall back into a downturn as worries about the financial sector and the economy have welled back up.

"The sentiment has just been so negative that even a whiff of positive news is driving the markets," said Kevin Dorwin, principal at wealth management firm Bingham, Osborn & Scarborough in San Francisco. "Oil the key factor right now because inflation has been on the top of investors' minds and a reduction in the price of oil signals that perhaps inflation will not get out of hand. That's very positive for both the stock and bond markets."

Beyond oil, natural gas prices also fell sharply Thursday after the Energy Department said domestic stockpiles rose last week - signaling a drop in demand. While levels remain below those of recent years natural gas fell 86.1 cents to settle at $10.537 per 1,000 cubic feet.

A sustained drop in energy costs would be welcome news for nearly all parts of the economy. Consumers have been hard-pressed by higher fuel and food costs. Wall Street is worried they will pare their spending on discretionary items to make room in their budgets for the higher-priced necessities. A pullback could be troublesome as consumer spending accounts for more than two-thirds of U.S. economic activity.

Last week, American drivers pumped 5 percent less gas than they did a year ago, marking 12 straight weeks of declining demand, reports CBS News business correspondent Anthony Mason.

"People are reacting to the high prices," oil trader Ray Carbone told CBS News. "They're just not using the gasoline and that has been causing prices to drop."

At $4.11 a gallon, gas is still at record highs, but that may not last if traders sense the economic slowdown in the U.S. and Europe is spreading to the countries where the appetite for oil is exploding, reports Mason.

"If it seeps into emerging markets, namely China, India and the Middle East, then we're going to see a bigger collapse in demand and we'll see lower prices for sure," said Carbone.

The declines in energy and profit reports from marquee names left investors in an acquisitive mood again Thursday. According to preliminary calculations, the Dow rose 207.38, or 1.85 percent, to 11,446.66. The Dow on Wednesday surged 276 points after oil fell and Wells Fargo & Co. posted better-than-expected earnings.

The 4.4 percent advance over two days was the Dow's best two-day percentage gain since October 2002 and the point increase gave the blue chips their best back-to-back point gain since late November last year.

Broader stock indicators also rose Thursday. The Standard & Poor's 500 index advanced 14.96, or 1.20 percent, to 1,260.32, and the Nasdaq composite index rose 27.45, or 1.20 percent, to 2,312.30.

Advancing issues outpaced decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.96 billion shares compared with 1.73 billion shares traded Wednesday.

Bond prices showed steep declines as investors turned away from the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 4.01 percent from 3.94 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices rose.

Wall Street also appeared placated by economic figures. A Commerce Department report showed construction of homes and apartments rose in June by 9.1 percent. The gain follows a change in New York laws that has given a boost to apartment building. Construction of single-family homes fell by 5.3 percent to the slowest pace in 17 years. Applications for building permits, one indicator of future activity, rose by 11.6 percent.

The Labor Department said the number of newly laid-off people seeking unemployment benefits rose by 18,000 last week to 366,000. However, the increase was below the number economists expected.

Corporate results helped buoy investor sentiment. JPMorgan Chase posted a 53 percent decline in its second-quarter earnings as mortgage and other loan defaults worsened, but the decline in profits wasn't as steep as Wall Street had feared and the stock rose $4.86, or 13.5 percent, to $40.80.

"There were some better-than-expected numbers out of the banks. I think we're maybe getting a little bit of a sigh of relief rally. Things had gotten so scary there for a few days," said Denis Amato, chief investment officer at Ancora Advisors in Cleveland.

Among other financials that gained, Fannie Mae and Freddie Mac jumped after Fitch Ratings affirmed long-term issuer default ratings on the government-chartered mortgage giants. Fitch cut Fannie's preferred stock rating and put Freddie's on watch for a possible downgrade. Investors have worried in recent weeks that they would run into serious financial troubles because of faltering mortgages. Fannie Mae rose $1.68, or 18 percent, to $10.93, while Freddie Mac rose $1.50, or 22 percent, to $8.33.

United Technologies rose $3.59, or 5.9 percent, to $64.70 after posting an 11 percent increase in its second-quarter profit. The maker of everything from jet engines to ventilation systems reported strong growth at its Otis elevator and Carrier air conditioner divisions. The company also raised its full-year forecast for revenue and per-share earnings.

Coca-Cola's second-quarter earnings fell 23 percent as the world's largest beverage company earned $1.42 billion. While the company's revenue and earnings excluding items topped expectations, analysts said volume growth was lighter than expected. The stock fell $2, or 3.8 percent, to $50.34.

The Russell 2000 index of smaller companies rose 9.88, or 1.44 percent, to 696.63.

Overseas, Japan's Nikkei stock average closed up 1.00 percent. Britain's FTSE 100 jumped 2.63 percent, Germany's DAX index rose 1.88 percent, and France's CAC-40 surged 2.76 percent.

[terrapin78]

Don''t get suckered into re-investing in Wall Street just yet.

Things are will still be volatile for months to come.

Close the Enron Loophole NOW!!!! Then we will really see the price of oil drop!!!!!!!

[condumbism]

GM up over 30% in 2 days. GM could easily be bankrupt in 6 months. GM is a leading example of why US industry across the board is now 2nd, even 3rd class. The fact that there have been no new fuel economy standards for 26 years, until recently is 100% the fault of Republicon style unfettered, deregulated capitalism.

[missingamerica]

Ain''t nothing like having the Secretary of the Treasury tell the financial institutions: "It does not matter how inept or even corrupt that you are, we will cover the rest of the Street''s butt by using the taxpayer''s dollars to bail out any firm that fails.".

And with THAT kind of fail-safe, of course the financials soared - and since everything else depends on them...well...zoom zoom...

It is a Republican thing, anyway. They hate paying taxes no matter how much they have benefitted from our infrastructure or how our educational system has given them better workers or how our national defense protects their greedy little butts from those outside of this nation who would destroy them.

So it matters not to them if they drive the country so deep into the hole that it will be generations before the United States is solvent again - better that the taxes that they have paid go to support their businesses and their investments than that one thin dime should be spent elsewhere.

[condumbism]

The American taxpayer is now paying for the unregulated banking industries near collapse under Republicon style failed capitalism. 8 months ago CDs payed 5% and a 30 year fixed mortgage was 5.6%. Today banks pay out 2.5% on CDs and charge 6.9% on a fixed 30 year mortgage. Vote for John McCain and the Republicon criminals for Congress for more of the same, or worse.

[daysrnumbrd]

Investment in corporate "America" is becoming more and more like one big Ponzi scheme!

[missingamerica]

Investment in corporate "America" is becoming more and more like one big Ponzi scheme!

Posted by DaysRnumbrd at 04:00 PM : Jul 17, 2008

lolll...it is not really corporate "America" anymore.

They may still have their headquarters and their executive personnel here so that they can take advantage of the relative lack of pollution and the safety and security that our infrastructure and military offers, but they have been putting their investments offshore at an ever increasing rate with the goal of insulating themselves from the repercussions of their abuse of the American worker and the Federal tax system.

Not that they give a *** about the American worker, but they are smart enough to know that he or she is also the American consumer, so they better have income coming in from elsewhere while they work at getting the American worker impoverished enough to make them as malleable as they were in the good old days that the American tycoons at the turn of the 20th century enjoyed.

Ya''ll cost too much and you aren''t respectful enough.

[daysrnumbrd]

Posted by ibsteve2u at 04:10 PM : Jul 17, 2008
.............

You are right, which is why I put quotation marks around America. Two companies come to mind that have ditched this country for tax and liability shelters:

Halliburton and Accenture. Halliburton now HQ''ed in Dubai and Accenture in the Bahamas.

Gold and silver, those are my top investments going forward. Regardless of their value, they are real items you can hold in your hand, not just some piece of paper basically equivalent to an IOU.

[missingamerica]

Me unhappy with the Republicans.

I could stand them better if they were honest enough to quit spouting all of that bull$hit about how they are the party of Christianity and morality.

Between the actions of the recently deceased Republican Congress and this Administration it has become impossible for me to listen to that with "a wink and a nod" anymore.

They worship money. Mammon. The once almighty dollar, if they can''t get euros or yen.

And that is all. End of story.

[mycommentspg]

Money, money, money is the reason for the big swings in the market. The fund managers with large blocks and the traders make money when it moves up or down. Kickbacks? Under-the-table deals?

[vnveteran72]

This is nothing but Window Dressing for the Retardds.
Dump your Stock Holdings now, if you haven''t already, before the Crash, because it''s coming down the road and no amount of Fed "Air Money" Bail-Outs is going to fix 7 1/2 years of Theft and Corruption.......
6000 or lower on the DOW will be seen before it''s over......

[oneamerican-]

The stock market is up.

Oil prices are down $15 per barrel in just 3 days.

The surge has worked in Iraq, and the last brigade of the surge is coming home in days.

What will the liberals find to whine about?

I''m sure they''ll make up something...

[architekker-2009]

President Bush''s threat on lifting a ban does work and OPEC didn''t want to lose the profit. Smart move! The sad part is that the democrat controlled congress refused to lift the ban on coastal areas just a moment ago. If the price went up, I blame the dumbocraps for blocking this bill.

It appears that President Bush''s magic wand is working. I got to get me one of these!

[vnveteran72]

It appears that President Bush''''s magic wand is working. I got to get me one of these!


--------------------------------------------------------------------------------

Posted by architekker at 05:39 PM : Jul 17, 2008
+ report abuse

A GED should be first on your list before more complicated goals like Magic Wands or Gainful Employment......

[oneamerican-]

Liberals hate good news.

And that makes me really happy.

[mcv57]

UK Rueters
July 16, 2008

Currency and inflation risk has investors looking beyond their shores. We asked economists to rate the prospects of the G8 nations. Given the grim mood, they called it "a bit like choosing between deck chairs on the Titanic." But they found some differences in outlooks - except for the UK. Find their views below.

Can''t see this soap-opera going nowhere but down. This Wall Show is just a game of chicken for the rich elite investors. Mer & Lych is bailing, and Wachovia is being audited.

[mcv57]

Posted by OneAmerican

One dummmmmmm American.

[randynason]

More good news: Speculators'' Heads Are Removed From Their Own Arses. Moods Improve As Gas Levels Decrease. Now, rip a good one, mate!

[randynason]

What will the liberals find to whine about?

I''''m sure they''''ll make up something...


--------------------------------------------------------------------------------

Posted by OneAmerican-

Uh- oh... Along with the decline in gas prices, it appears as though the neo-conservative supporter''s I.Q. has also taken a serious decline, and just in time for the upcoming election, too.

[j_davis_meeb]

-The stock market is up.

-Oil prices are down $15 per barrel in just 3 days.

-The surge has worked in Iraq, and the last brigade of the surge is coming home in days.

-What will the liberals find to whine about?

I''''m sure they''''ll make up something...

Posted by OneAmerican- at 05:12 PM : Jul 17, 2008

An example of OneAmerican''s unique brand of optimism:

"Look, Honey. The toilet is stopped up but by golly we now have two new places to potty. You can pizz in the sink and I''ll schitt in the bathtub.

[daysrnumbrd]

An example of OneAmerican''s unique brand of optimism:

"Look, Honey. The toilet is stopped up but by golly we now have two new places to potty. You can pizz in the sink and I''ll schitt in the bathtub."

Posted by j_davis_meeb at 06:49 PM : Jul 17, 2008
...........

That was the best post of the day! On any article!

[jimfinster]

Liberals hate good news.

And that makes me really happy.

Posted by OneAmerican




Conservatives are getting kicked out of office.

And that makes me really happy.

[oneamerican-]

"Conservatives are getting kicked out of office.

And that makes me really happy."

Posted by jimfinster at 08:36 PM : Jul 17, 2008


Don''t count your chickens before they''ve hatched.

You''ll just have to have Braaaaaawwwwk O''Bummer sit on the nest for several months...

[downtowner97]

Hooray!!! Bush has lowered oil prices by lifting the ban on offshore oil drilling. The ban on offshore drilling was signed into law by that evil liberal hippie, Bush''s dad. Take that libs!!!

[stn_sage]

(OneAmerican''s points, my counter-points)
Posted by OneAmerican- at 05:12 PM : Jul 17, 2008
------------------------------------
1. His: The stock market is up. Mine: It''s a one day rise of +200 points, it''s down 3,000 points from it''s high! No reason to celebrate!

2. His: Oil prices are down $15 per barrel in just 3 days. Mine: The price per gallon hasn''t dropped a penny where I''m at! The decline is meaningless.

3. His: The surge has worked in Iraq, and the last brigade of the surge is coming home in days. Mine: The insurgents are taking payoffs, and will start up again when they''re ready! The brigade will be sent to ''stan or home for a short rest first!

4. His: What will the liberals find to whine about? Mine: Plenty! With continued opportunities! Is this the best neocons have to BRAG about?! PATHETHIC!

5. His: I''''m sure they''''ll make up something... Mine: They don''t have to, Bush/GOP constantly gives them reason to object! But, the neocons will contrive some phony accusation!

In short, we have the wishful thinking versus reality dichotomy here! The neocons in Bizarroland, and me in the declining ole USA! Ain''t in grand, though?!

[nskduke2]

This is good that the oil price per barrel is dropping. A three-day drop is pretty significant.It is also good to see the stocks rally.Believe it our not this is the time to start investing in the stock markets. Look at GM their stocks are worth about $6.26.

[wardoglrs]

Not so fast fellers
Pakistani Investors Stone Exchange as Stocks Plunge


http://www.bloomberg.com/apps/news?pid=20601087&sid=aVZ47MTtPsPY&refer=home

[noaanhc]

Everyone is cheering the drop in oil prices,but there is just one problem,if gasoline drops again to below $3.00 many Americans will go back to their bad habits of driving their gas guzzling cars and SUVs and ignoring the advice to conserve energy,which will eventually raise the price of oil once again.

Americans are addicted to oil.That is about only thing President Bush ever said that I agree with.

[nskduke2]

Noaanhc,You are right.Lets just hope that the American people are learning a lesson here.

[shanev137]

"People are reacting to the high prices," oil trader Ray Carbone told CBS News. "They''re just not using the gasoline and that has been causing prices to drop."


----------


HOLY COW !!!!

YA THINK ????

GOLLY GEE WILLICKERS YOU''RE SMART !!!!

GOOD THING THAT COMPANY IS PAYING YOU 200K A YEAR !!!

[dan3232321]

Because NBC''s web site doesn''t allow commentary, I just want to say publicly that their nightly news with Katie Couric is the most pathetic, one-sided, miserable excuse for a news broadcast I have ever seen. Last night, Katie''s opening story was how bad inflation was - like we didn''t already know that and why we have inflation. At this same time she totally ignored the phenominal rally in the stock market because the perception is that the bottom of this recession may be near until her normal stock market review later in the broadcast. Today, she at least had the guts to briefly report about a 2nd great day in the stock market but immediately cut away to Merril Lynch''s bad earnings report. Katie Couric would simply rather slit her own throat than report anything positive this soon before a presidential election. Bad news is good news for Democrats! Its almost as transparent as her virtual mouth-kissing of Hilary Clinton!

[shanev137]

So basically..... "the whole global oil shortage" that happened in the past few weeks, that drove prices to record highs, was not severe enough to offset Americans cutting back on putting gas in their cars.

So once again I was right.....American consumption is what''s driving oil prices.....NOT CHINA....and NOT INDIA !!!

All you "supply and demand people" out there getting that yet? hahahahaha

[lovegetpeace]

Oh no! Oil prices are dropping. With Americans having a nano short memory. SUV sales will soon break all time records. Bicycle sales will drop like a ton.

[lovegetpeace]

Oh no! Oil prices are dropping. With Americans always having such a nano short memory, SUV sales will soon break all time high record and Bicycle sales will break all time low record. Mama Mia!

[alphaa10-2009]

NEVER TOO LATE TO WORRY-- 2

3. The same speculators are now busy, via hedge funding, buying up other increasingly scarce commodities which people must have to live. For example, food and water.

Yes, you read correctly-- the Fund People are buying large argicultural holdings around the world to manipulate prices as they never have before. Ditto for water. Coca Cola, Nestle, Pepsi and other corporate giants show an unseemly taste for acquiring control of public water supplies.

See link--
http://www.stopcorporateabuse.org/cms/page1131.cfm

[alphaa10-2009]

NEVER TOO LATE TO WORRY

Optimism is entirely premature--

1. A fever of 105F which abates to "only" 101F is not a rally, but a slight respite. When Bush took office-- before speculators began their dirty work on the market-- gas was $.99 a gallon, and the Saudis were on reasonably good terms. As Bush leaves office, gas is over $5.25 a gallon, and Sunni and Shia states want us to stay out of their region.

2. The floor price for oil continues the creature of speculation by sharks who understand a feeding frenzy can make them rich. And to hell with everybody else-- Bush lessez faire policy at its worst. The regulatory acumen to handle an amoral, NON-self-regulating market economy requires more understanding of public interest than Bush or minions ever claimed, much less possessed.

(See "Never Too Late to Worry" -- 2)

[cyberus-2009]

Have no fear!

A camel is SURE to *** within 100ft of a oil rig and set off a "fear of methane explosion" amongst speculators to keep the price of gas up.

[daysrnumbrd]

Stock market --- primarily driven by SPECULATION

Oil prices --- primarily driven by SPECULATION

Thus, the tide can and will shift at any moment for any reason.


Good night.

[gunfighter51]

It''s going to be another sad day for the liberals as the oil bubble is about to burst.

I always enjoy watching BIG LIBERAL cry.

[drinuk]

Oil dropping in value !!! This is serious, how on earth will Western Governments cope with recession if the percentage falls on the Gas Tax, it will be a clamity. Of course I remember now, they will put the tax up as the price drops, OPEC were quite right, that governments in America and Europe are taking a bigger slice than the producers.

Expect a Tax hike if the price falls.

[greeneyes222]

Good for the stocks, because the price of gas sure isn''t going down as the price of oil falls.

We need to start questioning if everything that''s good for the stock market is good for the consumer.

[credibility2]

More shenanigans on the market to mask, cover-up and hide reality. I don''t believe any of it.

[credibility2]

Why is it that when the trading price for crude goes up, even slightly, there''s an immediate hike in price at the pump, even on a daily basis, yet when crude trades down by dollars, there''s absolutely no reduction in the pump price? If the game is going to played to stick it to the consumer on the high side, it should also work in reverse, but greed is preventing this stabilizer. The price fix will continue as long as it''s allowed to continue.

[vnveteran72]

I hope the Neocon Cheerleaders once again believe these Reich Wingnut lies, and invest EVERYTHING they have in stocks today. It''ll be so much fun watching the poor dimbulbs lose everything at the hands of their heroes......too funny.....

"But, but,....Shrub said everything was swell and the Great Depression #2 was only a Lib Fairy Tale".....
....*sniff*.....

[gunshack1]

dan323231, Katie Couric works for CBS not NBC.

[tootall10142]

FPOR EVERY SUCCESS STORY THERE ARE TEN ABOUT FAILURE AND THIEVES.

[gunshack1]

Why is it that when crude oil goes up, the price at the pump goes up the same day, but when crude oil price drop, the price at the pump doesn''t go down for at least a week?

[petro49l]

The Western Hemisphere brims with petroleum. Central and South American Countries lease sites reasonably and cheap. American Oil Companies will not lose revenue to wars, transport, and expensive drill sites. People need a lower price for gasoline. This country should refuse Saudi sludge and their ten-year plan for energy.