Stocks finished Thursday sharply higher, shaking off some earlier weakness, as oil prices fell and investors anticipated the kind of fourth quarter rally they’ve seen over the last two years.
Falling oil prices, which were a downward force in the morning as energy stocks fell, helped send stocks higher in the afternoon, with retailers rising as worries about consumer spending were temporarily forgotten.
“We all look for catalysts, but sometimes markets go up because they’re ready to go up,” said John P. Waterman, chief investment officer at Rittenhouse Asset Management.
Exxon Mobil Corp., BP PLC, ConocoPhillips and other energy companies saw sharp drops as oil prices fell. But Target Corp. rose after its third-quarter earnings beat expectations. Wal-Mart Stores Inc. and Costco Wholesale Corp. rose with it.
The Dow Jones industrial average finished the day up 93.98 points, or 0.9 percent, while the broader Standard & Poor’s 500-stock index was up 10.31 points, or 0.8 percent. The technology-laden Nasdaq composite index jumped 20.87 points, or 1 percent.
Economic news was mixed. The University of Michigan’s mid-month report on consumer sentiment for November increased from October’s levels, according to news accounts. Michigan’s report is released only to subscribers. Analyst said the Michigan report shows shoppers were still spending freely even though sentiment was down.
The Commerce Department said September’s trade deficit soared 11.4 percent from August to $66.1 billion, pushed higher by increased oil imports following the Gulf Coast hurricanes and a record deficit with China.
The stream of unemployment filings from the recent Gulf Coast region hurricanes continues, although the numbers are no greater than most analysts expected. The number of Americans who lost their jobs in the hurricanes’ aftermath rose to 542,000 last week.
Shares of Cisco Systems Inc. tumbled more than 3 percent the day after the world’s largest network equipment maker reported its fiscal first-quarter profit slipped as it expensed employee stock options for the first time. The company also predicted weaker-than-expected sales. Cisco fell 60 cents to $17.15.
Exxon fell $1.05 to $56.45; BP fell $1.03 to $64.30 and Conoco fell $2.20 to $63.39.
General Motors shares, already at 13-year lows, fell another 4.8 percent after the world’s largest automaker said it would restate its earnings for 2001 because an accounting error led it to overstate its 2001 profit by up to $400 million. GM fell $1.12 to $23.51.
Target Corp., the nation’s No. 2 discount chain, rose $2.29 to $58.85 after it reported an 18 percent drop in earnings for the third quarter despite higher revenue.
Even with the drop, the company’s earnings beat analysts’ estimates. The company reaffirmed its expectations for the second half of its fiscal year, which ends in January.
Wal-Mart rose 84 cents to $49.04 and Costco rose $1.41 to $50.06.
Fannie Mae fell 1 cent to $46.39 after it said it identified about $11 billion in accounting errors. The government-sponsored company, which finances one of every five home mortgage loans in the United States, said it likely will not complete the reworking of its accounting before the second half of next year. Fannie Mae President and CEO Daniel Mudd said more issues are expected to emerge before Fannie completes its comprehensive review of its accounting policies and practices.
Overseas, Japan’s Nikkei stock average rose 0.1 percent. In Europe, Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index was up 0.1 percent and France’s CAC-40 fell 0.02 percent.