NEW YORK — Wall Street at least temporarily shrugged off some of its many concerns Wednesday and bounded higher thanks to a drop in oil prices. The Dow Jones industrial average rose 276 points, 2.5 percent, for its best daily gain in three months.
The broader Standard & Poor’s 500 index also gained 2.5 percent, while the technology-dominated Nasdaq composite index surged 3.1 percent. Investors exited government bonds and moved back into stocks as it appeared that the slowing economy will curtail demand for fuel and, in turn, reduce energy costs.
Light, sweet crude fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, bringing its two-day decline to $10.58.
In addition to sinking oil prices, investors found relief in a decision by Wells Fargo & Co. to boost its dividend that helped counter some of the market’s concerns about the health of banks.
The San Francisco-based bank’s move to raise its payout, along with its tamer- than-expected profit decline, was seen as a bullish sign for the troubled sector.
Still, the Labor Department’s report that consumer prices shot up in June at the second-fastest pace in 26 years reminded investors that inflation still poses a threat to economic growth.
And Wall Street remains uncertain about the economy, specifically the financial sector. This week has brought fresh attention to potential trouble spots in the mortgage market. Fannie Mae and Freddie Mac, the government- chartered mortgage financiers, are still a concern, as are regional banks that could have bad mortgage debt on their books.
But, for the moment, investors were pleased by the drop in oil from record levels.
