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US stocks bounce back after spike in oil prices boosts energy sector

Thursday, July 26, 2007

After a volatile day, U.S. stocks bounced back from the steepest drop in four months to close ahead Wednesday after a spike in oil prices fueled the energy sector, bolstering shares of the likes of Exxon Mobil and Chevron Corp.

The stock market, coming off Tuesday's 226-point tumble in the Dow Jones industrial average, seesawed throughout Wednesday's session. Ultimately, it drew confidence from better-than-expected quarterly profits at Web retailer Inc. and plane manufacturer Boeing Co., and acquisitions involving German engineering company Siemens AG and drug maker Merck & Co.

Meanwhile, the National Association of Realtors on Wednesday confirmed that the housing market is far from recovery when it reported that sales of existing homes dropped 3.8 percent in June to the slowest rate in more than 4 years. The figure was worse than analysts expected, and followed data from the Mortgage Bankers Association showing mortgage applications fell for the first time in four weeks to a five-month low.

Wall Street, now at the peak of second-quarter earnings season, has been extremely volatile lately. For seven straight sessions, the market has risen one day, fallen the next, then risen again. Over that span, the Dow has lost 165.91 points, or 1.2%.

The Dow rose 68.12, or 0.50%, to 13,785.07, after trading up more than 100 points and down more than 40. Broader stock indicators also rose in shaky trading. The Standard & Poor's 500 index climbed 7.05, or 0.47%, to 1,518.09, and the Nasdaq composite index advanced 8.31, or 0.31%, to 2,648.17. Despite the gains in the major indexes, declining issues outnumbered advancers by about 10 to 7 on the New York Stock Exchange. Consolidated volume came to a heavy 4.14 billion shares, up from 4.06 billion Wednesday.

Treasury bonds rose after the weak housing data prompted investors to buy safe government assets. As bond prices rose, the benchmark 10-year Treasury note's yield decreased to 4.90% from 4.95% late Tuesday.

Posted by FR at 9:08 AM  


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