From Deseret News archives:
Stocks up as oil price drop eases inflation fears
Oil's retreat helped soothe some of Wall Street's worries about inflation's impact on consumer spending. Crude briefly reached a new trading high of $126.40, but investors seemed shy, for the time being at least, to add to oil's huge gain of nearly $10 last week. Light, sweet crude oil fell $1.73 to settle at $124.23 per barrel on the New York Mercantile Exchange.
"This market does seem to be reacting positively to any sort of easing we see in the energy patch," said Craig Peckham, market strategist at Jefferies & Co.
Investors also got some encouraging news about the credit crisis from London-based HSBC Holdings PLC, which said its first-quarter profits were up from a year ago although the global banking company took a $3.2 billion write-down on subprime mortgage assets in the United States. The company did echo other assessments that the U.S. was likely to fall into recession this year.
JPMorgan Chase & Co. CEO Jamie Dimon said at a conference Monday he estimates the credit market crisis is 75 percent over, but that the recession is just beginning.
Peckham said some of the buying was a natural move higher after last week's decline, in which the Dow lost 2.4 percent and the S&P 500 declined 1.81 percent.
"This market, after having had a pretty rough last week, is prone to drawing in some more value-seekers," he said.
The Dow rose 130.43, or 1.02 percent, to 12,876.31.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 15.30, or 1.10 percent, to 1,403.58, and the Nasdaq composite index rose 42.97, or 1.76 percent, to 2,488.49.
Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.80 percent from 3.78 percent late Friday. After an early strong start, the dollar ended mixed against most other major currencies, while gold prices fell.
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