US stocks gain further on profits as oil prices sink

July 18th, 2008 - 7:53 am ICT by IANS  

New York, July 18 (DPA) Stocks rallied on Wall Street for a second day Thursday on falling oil prices as companies have begun to report better than expected fourth quarter earnings. JPMorgan, the largest US bank by market value, led financial shares to their biggest-ever two-day surge as profit beat estimates by 22 percent, according to Bloomberg financial news. A number of other banks also climbed on earnings that exceeded projections. Home- improvement chains Home Depot Inc and Lowe’s Cos led gains in all 29 companies in the Standard & Poor’s 500 Retailing Index as oil slid below $130 a barrel for the first time in a month.

“The trade that’s been the big winner has been long energy and short financials; the last couple of days maybe we’re seeing a reversal of that,” Gavin Graham, chief investment officer at Guardian Group of Funds Ltd in Toronto told Bloomberg. Guardian Group manages $5.7 billion.

The blue-chip Dow Jones Industrial Average picked up 207.38 points, or 1.85 percent, to 11,446.66. The broader Standard & Poor’s 500 Index earned 14.96 points, or 1.2 percent, to 1,260.32. The technology-heavy Nasdaq Composite Index rose 27.45 points, or 1.20 percent, to 2,312.30.

The dollar slipped to 63.03 euro cents from 63.21 euro cents on Wednesday, and bumped up to 106.25 Japanese yen from 105.10.

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