Wednesday, May 26, 2004

Stocks finish strong as oil worries drop

By Adam Geller
The Associated Press

NEW YORK - Investors heartened by signs of a stabilizing economy and a steep decline in oil prices propelled stocks sharply higher Tuesday, giving the Dow Jones industrials and Standard & Poor's 500 index their best day in two months.

Analysts said investors may have interpreted a new report on consumer confidence Tuesday as a sign that economic growth is moderating. That helps eases worries about inflation and seed hopes of strong, consistent corporate profits in coming months, they said.

"The market is a lot more receptive to a lessening of growth as opposed to an acceleration of growth," said Ned Riley, chief investment strategist at State Street Global Advisors.

Trading was relatively light in advance of Memorial Day, tending to skew prices. Nonetheless, the market's tone has improved after weeks of selling amid investors' alarm over higher interest rates and rising oil prices.

The Dow finished up 159.19, or 1.6 percent, at 10,117.62. That was the blue chips' biggest advance since March 25.

Broader stock indicators also finished with robust gains. The S&P 500 index was up 17.64, also 1.6 percent, at 1,113.05, its biggest gain since March 25; and the Nasdaq composite index was up 41.67, or 2.2 percent, at 1,964.65, its best performance since April 28.

Tuesday's advance was less about a single news item than a reflection of gradually changing sentiment, analysts said.

"I don't see any of those events today as being market movers," said Hugh Johnson, chief investment officer at First Albany Corp.

"The message of the market is that it's starting to look as though conditions are starting to get stable," he said.

Chiquita boss cuts own bonus
Vexed by fees, lawyer takes on credit cards
Home sales keep up record pace
Latest style is young, funky
Omnicare rejected by rival
Jillian's gets offers for club in Covington
Stocks finish strong as oil worries drop
Grasso pledges to file own suit
Krispy Kreme blames slump on carb counters
SBC ends strike with deal guaranteeing union jobs
American United Life CEO plans to step down
Business digest