Stocks shoot up as oil price falls for second day

7/18/2008

NEW YORK - Stocks shot higher yesterday, extending their rally into a second session, again boosted by tumbling energy prices.

The price of light, sweet crude oil fell $5.31 to settle at $129.29 a barrel; oil has dropped more than $15 in just the past three sessions.

Natural-gas prices also fell sharply yesterday after the Energy Department said domestic stockpiles rose last week.

Although levels remain below those of recent years, natural gas fell 86.1 cents to settle at $10.537 per 1,000 cubic feet.

The Dow Jones industrial average rose 207.38 to 11,446.66. The Dow had surged 276 points Wednesday 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.

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

The two-day surge lifted the major indexes out of bear market territory, which is defined as a 20 percent drop from the market's recent high, which was in October.

Corporate earnings reports also helped buoy the market. JPMorgan Chase & Co. posted a 53 percent decline in its second-quarter earnings as mortgage and other loan defaults worsened, but the drop wasn't as steep as Wall Street had feared, and the stock rose $4.86 to $40.80.

Fannie Mae and Freddie Mac jumped after Fitch Ratings affirmed long-term issuer default ratings on the government-chartered mortgage giants.