NEW YORK - Wall Street rebounded yesterday, rising moderately as crude oil surged more than $2 a barrel and triggered a rally among energy producers. Investors regained their optimism about corporate profits after a series of positive earnings reports.
Energy prices spiked after Energy Secretary Samuel Bodman said the United States would double the size of the nation's Strategic Petroleum Reserve. Prices were already rising as a cold snap in the northeastern part of the United States was seen increasing demand for heating fuel in the region.
Exxon Mobil Corp. led blue chips and was among the Dow Jones industrials' biggest gainers, while fellow refiners ConocoPhillips and Chevron Corp. also surged during the session. The advance in oil stocks helped the Dow recover from an 88-point decline Monday, its biggest drop in two months and a reaction to investor uneasiness about earnings.
The markets also got a lift yesterday from robust earnings reports from United Technologies Corp. and Texas Instruments Inc. This helped offset a warning from telecommunications-equipment-maker Alcatel-Lucent that it would not post a profit during the fourth quarter because of a steep decline in sales.
The Dow rose 56.64, or 0.45 percent, to 12,533.80.
Broader stock indicators also advanced. The Standard & Poor's 500 index was up 5.04, or 0.35 percent, at 1,427.99, and the Nasdaq composite index added 0.34, or 0.01 percent, to 2,431.41.
Bond prices fell, with the yield on the benchmark 10-year Treasury note rising to 4.81 percent from 4.76 percent late Monday.
Bill Strazzullo, chief market strategist at Bell Curve Trading, said he believed the market might actually be at its peak for the year. He said he believed stocks would pull back as it became increasingly likely that the Federal Reserve would not cut interest rates.
In economic news, the Richmond Fed Survey showed a slip in its manufacturing index this month. Meanwhile, the Conference Board said U.S. economic activity was set to increase slightly in the coming months.
The dollar was mixed against other major currencies, while gold prices spiked. A barrel of light, sweet crude rose $2.47, or 4.7 percent, to settle at $55.04 on the New York Mercantile Exchange.
As has been typical in previous sessions, oil companies got a boost on the rebound in crude prices. The refiners stand to benefit if the government expands its reserves. Exxon Mobil rose $1.59, or 2.2 percent, to $74.49; ConocoPhillips was up $1.59, or 2.5 percent, at $64.97; and Chevron increased $1.34, to $72.56.
This helped investors shake off Alcatel-Lucent's statement that it would post a loss for the first full quarter since combining in last year's $11.6 billion deal between France's Alcatel and Lucent Technologies Inc. of the United States. The company blamed integration costs and weaker sales because of consolidation among its customers.