US stocks surge as oil price falls below $70

October 17th, 2008 - 7:34 am ICT by IANS  

New York, Oct 17 (DPA) US stocks surged Thursday after a steep dive a day earlier amid ongoing fears of a global recession.The blue-chip Dow Jones Industrial Average gained 401.35 points, or 4.68 percent, to 8,979.26 in a late rally, partly on the back of falling oil prices.

In a sign of the uncertain times, the index dipped and rose during the day over a span of more than 700 points for the sixth straight day, according to Bloomberg News.

Crude oil dropped below $70 per barrel in New York to its lowest level since June 2007, sparking a rally in retail companies that were deserted by weak sales figures Wednesday.

The broader Standard & Poor’s 500 Index picked up 38.59 points, or 4.25 percent, to 946.43. The technology-heavy Nasdaq Composite Index earned 89.38 points, or 5.49 percent, closing at 1,717.71.

The gains were spurred in part by news that inflation had held steady in September, making further interest rate cuts by the Federal Reserve more likely.

On a seasonally adjusted basis, the Labour Department’s consumer price index remained “virtually unchanged” in September from the previous month after seeing its first decrease in two years in August with a fall of 0.1 percent. Prices increased 4.9 percent year-over- year, after a 12-month increase of 5.4 percent in August.

Wednesday, the Dow fell by 733.08 points, or 7.87 percent, to 8,577.91, nearly erasing a massive rally Monday in what had been a brief glimmer of hope following the rush by governments to stave off wider economic fallout caused by the financial crisis.

The S&P 500 lost the largest share, plunging by 9.03 percent, or 90.17 points, to 907.84 when trading concluded Wednesday.

On the currency markets, the dollar climbed against the Japanese yen to 101.64 yen from 99.93 yen Wednesday and rose against the euro to 74.29 euro cents from 74.10 euro cents.

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