US stocks rose yesterday, led by Apple Inc and other technology bellwethers, as investors bet that a sharp drop in oil prices will help shore up consumer and business spending.
A drop of nearly 3 percent in crude was a welcome development after oil prices rose to a record above US$135 barrel last week, fanning worries about inflation, corporate profits and a slowdown in consumer spending.
Shares of consumer-oriented companies, including Home Depot Inc and other retailers, gained along with technology shares, even as energy companies, including Exxon Mobil Corp, declined with the price of oil.
Shares of Apple, the maker of the iPhone and the iPod, and Internet search leader Google Inc both jumped 3 percent and were the Nasdaq's top two advancers. The Nasdaq jumped 1.5 percent.
International Business Machines Corp led the Dow's gainers with a rise of 2.5 percent.
"Oil being down helps because people lately seem to be thinking of technology (spending) as discretionary," said Peter Jankovskis, director of research at OakBrook Investments in Lisle, Illinois. "I really think what we're doing is building a very solid base for a strong rally to end the year."
The Dow Jones industrial average finished up 68.72 points, or 0.55 percent, at 12,548.35. The Standard & Poor's 500 Index gained 9.42 points, or 0.68 percent, to 1,385.35. The Nasdaq Composite Index shot up 36.57 points, or 1.50 percent, to 2,481.24.
TECHS SHINE
Apple shares climbed to US$186.43 on the Nasdaq, while Google shares rose to US$560.90.
IBM, a technology services company, finished at US$127.32 on the New York Stock Exchange and was the S&P 500's second biggest boost, behind Apple.
Home builders were also among standouts following a Commerce Department report that showed a surprise 3.3 percent increase in April new-home sales.
The Dow Jones home construction index rose 1.3 percent. Shares of luxury home builder Toll Brothers added 1.6 percent to US$21.40, while Centex Corp, the fourth-largest US home builder, rose 2.1 percent to US$19.40.
Among retailers, home improvement chains finished higher, with Home Depot up 1.9 percent at US$27.28 on the NYSE and rival Lowe's Cos Inc up nearly 1 percent at US$23.51. Shares of Wal-Mart Stores Inc, the world's largest retailer, climbed 1.2 percent to US$56.40.
AIRLINES SOAR
Airline stocks also gained on the lower crude oil prices, with the airline index up almost 4 percent. Shares of Delta Air Lines surged 7.6 percent to US$5.92 on the NYSE and those of UAL Corp, parent of United Airlines, climbed 8.8 percent to US$8.18 on Nasdaq.
Shares of AMR Corp, parent of American Airlines, ended up 8.2 percent at US$6.84 on the NYSE.
But after the bell AMR's shares fell more than 2 percent to US$6.70 as the company announced capacity cuts and plans to retire planes in response to rising fuel costs and the softening economy.
Also down in late trade were shares of JetBlue Airways Corp, which declined more than 4 percent, as the carrier announced plans to defer delivery of 21 Airbus A320 aircraft and said it would issue convertible debt and a related share deal with Morgan Stanley. JetBlue shares had ended up 5 percent at US$4.41 on the Nasdaq.
In the regular session, shares of banks and other financial services companies were also among the notable gainers, with value seen in the downtrodden sector. Shares of Citigroup Inc, the largest US bank, gained 2.6 percent to US$21.66 on the NYSE, while those of JPMorgan Chase & Co, the No. 3 US bank, gained 1.6 percent to US$43.01.
US crude oil for July delivery settled down US$3.46, or 2.6 percent, at US$128.73 a barrel on the New York Mercantile Exchange amid a stronger dollar and demand concerns.
ENERGY SLIPS
Energy shares were top drag on the broad S&P 500, with Exxon Mobil down nearly 1 percent at US$89.80 and Chevron Corp down 1.2 percent at US$99.58.
In economic news, the Commerce Department reported that new-home sales rose in April, marking the the first increase since October, although the gain came after a big downward revision to the prior month.
The Standard & Poor's/Case Shiller composite index of 20 metropolitan areas, meanwhile, showed prices of previously owned homes fell 2.2 percent in March from February, deepening their year-on-year decline.
Trading volume was light on the New York Stock Exchange, with about 1.12 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq about 1.75 billion shares traded, also short of last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by a ratio of about 7 to 4 on the NYSE and by 9 to 5 on Nasdaq.