-- Stock market investors celebrated another drop in oil prices on Thursday, driving the broad Standard & Poor's 500-stock index to its highest point since the Sept. 11, 2001, terrorist attacks and pushing the blue chip Dow Jones industrial average back into positive territory for the year.
The buying spree that began after the presidential election continued as the price of benchmark crude oil dropped to nearly $8 below the high of $55.67 reached last month.
Traders and money managers said oil prices, combined with upbeat comments on the economy from the Federal Reserve and a strong third-quarter earnings season, have combined to lure skittish investors back into the stock market.
"The peaking of oil prices, at least temporarily, is a very powerful positive," said Donald B. Gimbel, portfolio manager at Carret Investment Counselors in New York. "There was also a lot of money sitting on the sidelines waiting for the election result."
Gimbel added that inflation no longer appears to be a threat and that less money is flowing into real estate as investors fear that housing prices may be nearing a peak.
"You combine all that with a market trading at about 15 or 16 times next year's earnings, which is not overpriced, and you wind up with more buyers than sellers and a rising market."
For the day, the Dow gained 84.36 points, or 0.8 percent, to close at 10,469.84. The Dow is up 0.2 percent for the year. The S&P 500 finished up 10.57 points, or 0.9 percent, to close at 1173.48. The index is up 5.5 percent for the year and is at its highest since Aug. 27, 2001.
The Nasdaq composite index had the strongest day, rising 26.71, or 1.3 percent, to close at 2061.27. The Nasdaq is up 2.9 percent for the year.
Trading volume was slightly below the recent average as some investors took Thursday off for Veterans Day. About 1.4 billion shares traded hands on the New York Stock Exchange, compared with 1.5 billion on Wednesday. The Treasury bond market was closed in observance of the holiday.
Technology shares got a boost from Intel, which rose 31 cents, or 1.4 percent, to close at $23.17. The chipmaker announced a new chief executive on Thursday.
Microsoft gained 25 cents, or 0.8 percent, to close at $29.98. Traders attributed the rise in part to the software company's recent announcement that it would pay a $3 per-share dividend. "You saw some buying in advance of [the dividend payment] and that helped lift the Nasdaq," said Dan McMahon, head of listed trading at CIBC World Markets.
Despite recent gains, analysts said the stock market remains vulnerable to a renewed increase in oil prices as well as concerns over the war in Iraq and possible terrorist strikes.
"It's like the roaring '20s again," McMahon joked, referring to the bull market that preceded the crash of 1929 as an example of the vulnerability.
"Forget that it's still going to cost twice as much to heat your home this winter."
* The New York Stock Exchange composite index rose 59.75, to 6950.97; the American Stock Exchange index rose 5.70, to 1340.93; and the Russell 2000 index of smaller-company stocks rose 6.69, to 616.30.
* Advancing issues outnumbered declining ones by 8 to 3 on the NYSE, where trading volume fell to 1.39 billion shares, from 1.5 billion on Wednesday. On the Nasdaq Stock Market, advancers outnumbered decliners by 2 to 0 and volume totaled 1.75 billion, down from 1.83 billion.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 106.53 yen, down from 107.17 late Wednesday, and a euro bought $1.2915, up from $1.2895.
* Light, sweet crude oil for December delivery settled at $47.42, down $1.44, on the New York Mercantile Exchange.
* Gold for current delivery rose to $434.90 a troy ounce, from $434.00 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.