Stocks surge as falling energy prices bolster mood

NEW YORK — Wall Street surged 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 & Co. and United Technologies Corp. The Dow Jones industrial average rose nearly 200 points as oil fell more than $3 and brought its three-day decline to more than $13 a barrel.

Investors got a double dose of good news that helped alleviate weeks of angst about the economy.

Three components of the Dow industrials — JPMorgan Chase, United Technologies and Coca-Cola Co. — issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions.

The reports appeared to 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.

"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.

Meanwhile, light, sweet crude fell $3.35 to $131.25 on the New York Mercantile Exchange. Oil fell more than $4 Wednesday and more than $6 Tuesday, offering investors some hope that perhaps commodity prices will begin to decline.

And natural gas prices fell sharply after the Energy Department said domestic stockpiles rose last week, but remain below recent years' levels. Prices dropped 71.3 cents to $10.68 per 1,000 cubic feet.

A sustained drop in energy costs — particularly oil — 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.

But the decline in oil added to the optimism in early afternoon trading. The Dow rose 185.72, or 1.65 percent, to 11,425.00. The Dow on Wednesday surged 276 points, or 2.5 percent, logging its best daily gain in three months.