Oil Decline ??? WOW !!!!!!!

U.S. Stocks Push Higher On Oil's Decline, Fed Assurances




U.S. stocks on Tuesday moved solidly up after several visits to negative turf, with a broad sell-off in commodities pushing crude down for a second day and Federal Reserve Chairman Ben Bernanke offering solace to the battered financial sector.

"The market is bouncing back; yesterday there was a lot of negative news, and clearly the Fed's announcement today is helping. Of course oil coming down also helps," said Noman Ali, a portfolio manager with MFC Global Investment Management.

Down at the start, the Dow Jones Industrial Average (DJI) tossed its losses aside within the first 10 minutes of trading, and then struggled to retain its gains in volatile action.

As the final hour of trade approached, the Dow was up 82.64 points to 11, 314.6.

Of the blue-chip index's 30 components, 22 posted gains, recently led by Bank of America Corp. (BAC), up 5.3%, and Pfizer Inc. (PFE), up 4.1%.

The Dow's biggest loser was Alcoa Inc. (AA), off 3.7%, with the aluminum producer due to report on its second quarter after the close, in an unofficial kick off of the earnings season. .

The S&P 500 Index (SPX) rose 9.90 points to 1,262.21, with financials and health care leading sector gains, up 3% and 2.1%, respectively.

Of the S&P's 10 industry groups, energy declined the most, down 2.7%, followed by materials, recently off 0.4%.

Natural-gas shares led declines among energy stocks, with the sell-off continuing even after the U.S. Energy Information Administration said spot prices for crude would likely average $127 a barrel in 2008 and $133 next year. .

In an overall positive for the equities market, the price of crude futures slumped sharply for a second day, with the spot month down $4.67 to $136.50 a barrel, while Treasury prices declined were mixed, with the yield on the two- year note rising to 2.4%. The dollar firmed, with dollar index recently at 72.97, compared with 72.67 earlier on.

The technology-heavy Nasdaq Composite Index (RIXF) gained 27.67 points to 2, 270.99.

VMware Inc. (VMW) was among those dogging the tech sector, with its stock down 26.5% after the EMC Corp. (EMC) spinoff announced the departure of its chief executive and warned that sales would come in below previous estimates. .

Volume on the New York Stock Exchange surpassed 1.1 billion shares, and advancing issues ran ahead of those declining, roughly 9 to 7. On the Nasdaq, nearly 746 million shares traded and advancers topped decliners more than 3 to 2.

Active issues

Ambac Financial Inc. (ABK) soared more than 50% after the bond insurer disclosed collateral-posting requirements for its guaranteed investment contract business were smaller than some investors had feared. .

Office Depot Inc. (ODP) warned that North American same-store retail sales for the second quarter dropped 10%. Pepsi Bottling Group Inc. (PBG) edged past earnings estimates for the second quarter, but cut its revenue outlook for the year.

LCD-TV maker Syntax Brillian (BRLCD) sold some assets to TCV Group and filed for protection from creditors under Chapter 11 bankruptcy rules. It expects the common shares to have no value after the filing and reorganization.

Federal funds

"Unless and until the economic clouds part, we'll likely see the housing market continue to struggle," Mike Larson, analyst at Weiss Research, said of the National Association of Realtors' measure of pending-home sales, which fell 4.7% in May. .

Ahead of the opening bell, stock-index futures had trimmed their losses as Bernanke said that the Federal Reserve might extend the time frame for embattled brokerages to tap the central bank for emergency funds.

The Fed move offered assurances that "there is little risk of actual bankruptcy for the [financial] sector," said Ali.

Worries that Fannie Mae (FNM) and Freddie Mac (FRE) may have to raise more capital, along with a report that Lehman Brothers Holdings Inc. (LEH) was temporarily barred from trading oil contracts reignited financial-sector worries ahead of second-quarter earnings season, prompting stocks to slide on Monday.

On Tuesday, shares of Fannie and Freddie gained some ground with comments by analysts and regulators easing worries the big mortgage buyers might have to return to the capital markets due to pending accounting-rule changes.

Adding his voice to the mix, Richmond Fed President Jeffrey Lacker said the Federal Reserve shouldn't wait too long before raising interest rates.

International stocks saw heavy pressure, with the Nikkei 225 losing 2.4% in Tokyo. The FTSE 100 lost 1.3% in London.
cnn.com