Wall Street continued its post-election rally yesterday as oil prices dropped by more than $2 a barrel and President Bush outlined plans for a second term.
Investors sent the Standard & Poor's 500-stock index to its highest level in 21/2 years and gave the Dow Jones industrial average of 30 blue-chip stocks its biggest one-day gain in over a year.
The S&P 500 rose 18.47 points, or 1.6 percent, to 1161.67, its highest closing level since early 2002. The Dow added 177.71 points, closing at 10,314.76, up 1.8 percent. That followed Wednesday's rally, which sent the Dow up 101 points. The technology-heavy Nasdaq composite index added 19.30, or 1 percent, to close at 2023.63.
Analysts said investors also were heartened by comments that Bush made indicating he would pursue a pro-business agenda.
"This was an enthusiastic market," said Andrew M. Brooks, head of stock trading at T. Rowe Price Associates in Baltimore. "The market actually got a bigger push from the president's press conference talk about tax cuts and tort reform and a simplified tax code."
In addition, analysts said the markets continued to show relief over the rapid conclusion of Tuesday's presidential election. Markets react poorly to uncertainty, and traders had been concerned about the chance of a prolonged vote tally.
Some investors had been holding back, waiting for the outcome of the election to be determined, traders said. "We're still focusing on the fact that for the better part of six to eight weeks, a lot of investors stayed on the sidelines waiting to see the results of the election," said Arthur Hogan, chief market analyst for Jefferies & Co. in Boston.
At the same time, oil traders on the New York Mercantile Exchange sent crude oil futures lower. U.S. benchmark crude oil for December delivery, which had been trading above $50, closed at $48.82 a barrel.
George J. Gaspar, an analyst for Robert W. Baird & Co. in Milwaukee, said several factors helped drive down oil prices yesterday.
He said the market was beginning to see that increased supplies from the Organization of Petroleum Exporting Countries were being produced on a consistent basis, helping diminish concerns about shortages.
He also said reports of the declining health of Palestinian leader Yasser Arafat gave the market hope that the peace process in Israel could be reinvigorated. A reduction in tensions in the Middle East would "have a corrective effect on oil prices," Gaspar said.
Declining oil prices helped boost stocks in the retail sector by raising the prospect that consumers might have more disposable income, analysts said. Among gaining retailers were Gap and J.C. Penney. Retail stocks also were boosted by higher sales in October and reports by several companies that third-quarter earnings would be better than expected.
Analysts said the market is awaiting a Labor Department report scheduled to be released today that will detail how many new jobs have been created.
* The New York Stock Exchange composite index rose 97.80, to 6885.20; the American Stock Exchange index rose 6.16, to 1329.48; and the Russell 2000 index of smaller-company stocks rose 6.80, to 602.13.
* Advancing issues outnumbered declining ones by 7 to 2 on the NYSE, where trading volume rose to 1.78 billion shares, from 1.77 billion on Wednesday. On the Nasdaq Stock Market, advancers outnumbered decliners by 9 to 1 and volume totaled 1.8 billion, down from 1.95 billion.
* The price of the Treasury's 10-year note was unchanged, and its yield remained at 4.08 percent.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 106.08 yen, down from 106.15 late Wednesday, and a euro bought $1.2867, up from $1.2821.
* Gold for current delivery rose to $430.10 a troy ounce, from $424.60 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.