New York – Tumbling oil prices and strong earnings from home-improvement retailer Lowe’s Cos. sent stocks higher Monday as investors regained their optimism about corporate profits and the health of the economy.
A bullish outlook and better-than-expected fourth-quarter results from Lowe’s soothed investors’ concerns that earnings would decline as the economy slowed through the year.
Oil prices fell after surging to nearly $63 per barrel Friday as a knee-jerk response to a foiled terrorist attack against a Saudi Arabian processing facility worked through the market. A barrel of light crude settled at $61, down $1.91, on the New York Mercantile Exchange. Investors have worried that a lasting spike in oil prices could spark inflation.
Analysts noted that Monday’s buying came after the markets turned in a mixed but promising performance last week despite increasing economic uncertainty and the terrorist attack, which points to strong investor enthusiasm for stocks.
“I think this is one of those times where it’s hard to be bearish,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati. “We’re still in a market that can easily fall prey to all kinds of intraday activity, up or down, but I think we have room to go higher over the next two to three weeks.”
The Dow Jones industrial average rose 35.70, or 0.32 percent, to 11,097.55.
Broader stock indexes also rose. The Standard & Poor’s 500 index added 4.69, or 0.36 percent, to 1,294.12, just 0.06 shy of its 4 1/2-year high set Jan. 11. The Nasdaq composite index gained 20.14, or 0.88 percent, to 2,307.18.
Bonds slipped, with the yield on the 10-year Treasury rising to 4.59 percent from 4.58 percent late Friday. The dollar was mixed against other major currencies, while gold prices fell.
Wall Street’s bullishness was undiminished by a disappointing report on the housing market from the Commerce Department.
