Wall Street rallies on lower oil price and strong consumer data

Dow’s 128 point gain erases its lackluster Q1 performance taking it to positive territory for the year

Wall Street rallied on Tuesday with US stocks getting a good lift from lower oil prices and strong consumer data. Apparent easing tension between UK and Iran led to crude prices below $65/bbl today, a 2% drop. This, coupled with reassurance about stabilization in the housing market, lifted market sentiments today after the second quarter made a slow start yesterday. Airline stocks were the biggest beneficiaries of the oil price drop. Financial stocks, a group that also struggled in the first quarter, were higher on the day. Technology, which also turned positive for the year, was another source of notable support.

29 out of 30 stocks closed higher today. P&G was the sole loser with a tiny drop of 12 cents. For the day (3 April, Tuesday) the Dow Jones Industrial Average closed higher by 128 points at 12510.3, Nasdaq higher by 28.07 points at 2450.33 and S&P 500 higher by 13.22 points at 1437.77. Altria, Home Depot, Boeing and 3M were the main Dow winners. With today’s gain, Dow is positive for the year.

Stocks extended early gains after the National Association of Realtors said that its pending home sales index, a measure of future U.S. home buying, rose 0.7% in February. However, the index is down 8.5% year on year, and the NAR said that sales may be experiencing "some fallout from a decline in subprime lending." Early sentiment also got a boost from rallies in overseas market.

Good housing erases subprime worries for the moment, chain store sales data boosts Retailers

After the second quarter kicked off slowly yesterday, after a discouraging ISM report, today stocks rallied within an hour after market opened today. The National Association of Realtors said pending home sales rose 0.7% in February to 109.3 following a revised 4.2% drop in January. The report eased the worst of fears that a housing crisis will develop and the same also alleviated concerns that the subprime mortgage meltdown will add to the huge inventory of properties already on the market.

Of the nine other sectors trading higher, Consumer Discretionary was paced the way as its 1.5% advance lifted the sector into positive territory for the year. Retailers got a big boost following a report that showed chain store sales for the week ending 31 March rose 4.9%, the fastest pace in two months. Homebuilders which this year's worst performing S&P industry group was among today's biggest winners following the upbeat housing report.

Home Depot was the leading blue-chip with a 2.4% gain among Dow components as signs of stability in housing lured bargain hunters to the beaten-down retailer. Among technology shares, Google rose 3% after news the Internet search giant will sell television ads through a partnership with EchoStar Satellite and Astound Cable, a small Internet provider in Northern California. eBay jumped 2.4% after Bear Stearns raised its earnings estimate for the online auctioneer.

Crude-oil futures for light sweet crude for May delivery closed at $64.64/barrel (lower by $ 1.3/barrel or 1.97%) on the New York Mercantile Exchange. Crude prices fell today as tensions between Iran and UK eased partially. Today’s closing prices were lowest in almost a week.

Trading volumes showed 1.6 billion shares exchanging hands on the New York Stock Exchange and 1.9 billion on the Nasdaq stock market. Advancing issues outpaced decliners by 3 to 1 on the NYSE and by 19 to 9 on the Nasdaq.

February Factory Orders and March ISM Services data are expected tomorrow. On the earnings front, Best Buy and Circuit City feature among the main companies that will come out with earnings report.

Wall Street bleeds on a turbulent Tuesday

Dow posts biggest one day loss in over five years plunging 416 points

U.S. stock market witnessed its worst one-day performance since 2001 on Tuesday, with the Dow Jones Industrial Average, at one point, losing 200 points in less than a minute just an hour before closing bells were to ring. After a sell-off in China fueled concerns about growth, Wall Street was bruised and was left bleeding for the entire day. Dow, Nasdaq and S&P 500 tumbled 3.3%, 3.9% and 3.4% respectively for the day.

Concerns that tighter credit conditions in China and Japan might dampen global growth first sent Shanghai sliding 9% overnight before the sell-off spread to other markets. Higher oil prices and some disappointing economic news just worsened the situation further. Today's Dow loss was also the biggest percentage decline since the index fell 3.67% on 24 March, 2003 just before the United States invaded Iraq.

The suicide bombing attack at the main U.S. military base in Afghanistan just as Vice President Dick Cheney was visiting also rattled markets.

The Dow was down as much as 546 points (-4.3%) at one point, before bouncing back to close down 416 points. That was still the biggest one-day point decline since the markets reopened on 17 September, 2001 (after 9/11) when it fell by 684 points. With today’s trading, market decline wiped out all of the year's gains for the Dow and the S&P 500.

Ultimately for the day, The Dow Jones Industrial Average closed lower by 416.02 points at 12216.24, Nasdaq lower by 96.66 points at 2407.86 and S&P 500 lower by 50.33 points at 1399.04.

All 30 stocks in the Dow ended lower for the day along with 497 stocks in the S&P 500. The only winners were RadioShack and Questar. While Walt Disney was Dow’s biggest loser, the Dow component that suffered minimal loss was GE.

Trading volumes hit record levels on the New York Stock Exchange, where more than 2.3 billion shares exchanged hands. More than 3 billion shares traded on the tech-heavy Nasdaq stock market. Declining issues outpaced gainers by 29 to 4 on the NYSE and by 14 to 1 on the Nasdaq.

In addition, the New York Stock Exchange said that trading was disrupted by "intermittent technical problems" toward the end of the day. Most traders translated that to mean that the exchange's computers were overwhelmed by the volume of trading, and there were fears the problems would spill over into tomorrow's trading.