Stocks climb as oil falls

NEW YORK — A sharp decline in oil prices and a surprise drop in wholesale prices pushed stocks higher Friday as investors' concerns about third-quarter earnings were mitigated. The Nasdaq composite index surged with investors buying heavily into an oversold technology sector.

Oil prices fell briskly through the afternoon, again moving below $43 per barrel after spiking higher on Thursday. A barrel of light crude settled at $42.81, down $1.80, on the New York Mercantile Exchange.

Investors welcomed the 0.1 percent drop in the Producer Price Index, the Labor Department's measure of wholesale prices, since the news was a strong sign that the economy has still managed to keep inflation at bay despite this summer's rising oil costs.

A profit warning from Alcoa Inc., which slashed its third-quarter forecast by about 40 percent, weighed heavily on investors' minds and kept the Dow Jones industrial average lower for most of the session. Automotive systems manufacturer Visteon Corp.'s warnings drove new fears about the health of the auto market and overall consumer spending.

"I think investors have become a bit spoiled with all the positive pre-announcements and upside earnings surprises we've had over the last year," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "Companies have been guiding up over the last several quarters, and now investors have become overly enthusiastic. It behooves companies to keep expectations reasonable. And we're still seeing profit growth, it's just that it's moderated."

The Nasdaq gained 24.66, or 1.3 percent, to 1,894.31. Other stock indicators also moved higher. The Standard & Poor's 500 index was up 5.54, or 0.5 percent, at 1,123.92, and the Dow Jones industrial average rose 23.97, or 0.2 percent, to 10,313.07.

For the week, the Dow rose 0.5 percent and the S&P was up 0.9 percent, while the Nasdaq soared 2.7 percent, though the tech-focused index remains down 5.4 percent for the year.

New uncertainties kept stocks volatile through the week, with concerns over employment, oil prices and earnings all weighing on Wall Street. Positive earnings outlooks from Nokia Corp. and Texas Instruments Inc. boosted long-suffering tech stocks and the Nasdaq, while blue chips suffered from muddled economic data and negative outlooks.