Stocks rally for 2nd day: Dow surges 305 points; oil jumps 7%
The January blues on Wall Street have given way to green arrows and gains in February for a second straight session as Wall Street reacts to firming oil prices, less gloomy news related to Greece and another global central bank cutting interest rates.
The Dow Jones industrial average surged 305.36 points, or 1.8%, to close at 17,666.40. The Standard & Poor's 500 index gained 29.18 points, or 1.4%, to 2050.03. The Nasdaq composite rose 51.05 points, or 1.1%, to 4727.74.
Oil on the U.S. market surged as much as 7%, to close at $53.05 a barrel in New York. After a seven-month drop of more than 50%, speculation is rife that oil prices might have found a bottom as producers cancel projects and more drilling rigs stand idle.
The market gains gains come on top of Monday's strong rally as the Dow jumped almost 200 points, putting its two-day total to 501 points. That's the best two-day gain for the blue-chip index since Jan. 7-8.
February is so far proving to be a healthy antidote to a dismal start to 2015 in January. The weakness in the first month of the year had spooked Wall Street, as history says a down January often suggests a rocky road for stocks for the entire year.
Car sales continue to hum, as well. Ford Motor sales jumped 15.3%, General Motors gained 18.3% and Chrysler Group sales were up 14% from a year earlier.
Energy stocks boosted the market as Exxon-Mobil (XOM), which jumped 3%, and Chevron (CVX), up 3.3%, helped lead the Dow higher. The energy sector was the leading S&P 500 sector, rising 2.8%.
Hopes for a deal between Greece and its European creditors got a boost after the country's new government backed away from demands to write off a chunk of its bailout loans, a prospect that had horrified creditors and investors.
"Central bank easing, European political progress, and a temporary halt to the collapse in crude is all constructive for U.S. risk assets," Paul Hickey, co-founder of Bespoke Investment Group told clients in an early-morning research note.Stocks got a boost as two major headwinds -- plunging oil prices and fears of a Greek exit from the eurozone -- lessened amid upbeat news on both fronts.
Greek stocks led a European market rally Tuesday. The Athens stock exchange rose as Greek bond yields eased, a sign investors are less worried about default. The Euro Stoxx index of eurozone stocks gained nearly 1%.
Australia's central bank cut its benchmark interest rate for the first time since August 2013 to a record low of 2.25% Tuesday in a bid to jolt an economy weighed down by falling commodity prices. The news shook the Australian dollar which dropped 1.8 % to 76.5 cents. The stock market was boosted, with the S&P/ASX 200 up 1.4%.
Oil giant BP reported a loss of $4.4 billion in the fourth quarter of 2014, as oil prices plunged.
The net income figure includes a $5 billion writedown on the value of BP's inventories, after the price of Brent crude, the benchmark for North Sea oil, dropped almost 50% last year.
In Asia, Japan's Nikkei 225 index dropped 1.3% to close at 17,335.85 and Hong Kong's Hang Seng index rose 0.3% to 24,554.78. The Shanghai Composite gained 2.5% to 3204.91.
Contributing: Jane Onyanga-Omara, Associated Press.
