New York – Stocks rallied higher Wednesday after oil futures fell by more than $1 a barrel and Dow Jones industrial Boeing Co. said its earnings had more than doubled.
A late-afternoon tumble in oil prices sent stocks higher in the final hour of trading. Oil fell $by 1.36 a barrel to settle at $66.56 on the New York Mercantile Exchange.
Stocks had stayed in a tight range most of the day, following Google Inc.’s fourth-quarter earnings, which missed analysts’ estimates, the first time the company hasn’t pleasantly surprised investors since its August 2004 initial public offering. It closed down $30.88, or 7.1 percent, at $401.78, losing more than $9 billion in market capitalization in a day.
Analysts were reassured by the fact that the overall market, which traded in a tight range during January, wasn’t overwhelmed by Google’s results.
“The fact that the market is continuing to stay at the upper end of the trading range, even with oil prices continuing to hover around their highs, is positive,” said Peter Cardillo, chief strategist, senior vice president and market analyst at S.W. Bach & Co.
“It indicates investor confidence,” he said.
The Dow rose 89.09, or 0.82 percent, to 10,953.95.
Broader indexes also were higher. The Standard & Poor’s 500 index rose 2.38, or 0.19 percent, to 1,282.46, and the Nasdaq composite index rose 4.74, or 0.21 percent, to 2,310.56.
Bonds fell as investors mulled possible future Fed rate hikes, with the yield on the 10-year Treasury note rising to 4.56 percent from 4.52 percent late Tuesday. The U.S. dollar was higher against other major currencies in European trading. Gold prices fell.
Google’s tumble continued a trend the market has seen in recent weeks: Stocks that disappoint fall hard. Some companies that have taken a recent beating, such as General Electric Co. and Citigroup Inc., have yet to recover.
