updated 11/5/2004 9:39:36 AM ET 2004-11-05T14:39:36

Wall Street bounded higher for the second straight day Thursday, as investors reveled in sharply falling oil prices and the pro-business agenda of the second Bush administration.

Major Market Indices

The Dow Jones industrial average rose 177.71 points, or 1.8 percent, to 10,314.76, adding to a 101-point gain seen Wednesday in response to news of President Bush’s re-election. It was the biggest one-day point gain for the Dow since Oct. 1, 2003 and its best close since Sept. 14.

Broader stock indices also rallied, with the Standard & Poor’s 500-stock index jumping 18.47 points, or 1.6 percent, to 1,161.67 — its highest closing level since March 19, 2002. The tech-rich Nasdaq composite index jumped 19.30 points, or 1 percent, to 2,023.63, closing at its highest level since June 30.

Oil prices tumbled below the $49 per barrel mark, giving investors hope that crude, which climbed steadily through October, could be stabilizing. A barrel of light crude was quoted at $48.82, down $2.06, on the New York Mercantile Exchange — the lowest settlement price since Sept. 29.

“I think oil has a lot to do with [today’s rally],” said Michael Palazzi, managing director of equity trading at SG Cowen Securities. “There are some technicals here that have come through as well, but oil is a huge part of this rally.”

The Dow has posted gains in seven of the last eight sessions, climbing 5.8 percent since Oct. 25. The Nasdaq has gained 5.7 percent and the S&P 500 climbed 6.1 percent over the same period, and both indices have risen for eight straight sessions.

Whether the rally will continue will likely depend on whether Friday’s job creation report from the Labor Department shows strong employment gains. The Federal Reserve meeting next Wednesday — which will likely result in a quarter percentage point hike in interest rates — is also expected to move the market.

“I think there’s a potential here to break out of the gentle downward trend we’ve seen since April,” said Rod Smyth, chief investment strategist at Wachovia Securities. “We’re now back to the issues that are more likely to dominate, which is Fed policy and oil prices and prospects for inflation, those kind of things.” Video: Latest market news

In perhaps a positive precursor to Friday’s jobs report, the Labor Department said first-time unemployment claims fell to 332,000 last week, down 19,000 from the previous week — a better showing than Wall Street had expected.

However, the nation’s productivity rose by only 1.9 percent in the third quarter, the smallest gain since late 2002 and far less than the brisk 3.9 percent pace in the second quarter, according to the Labor Department.

Investors welcomed moderate gains in October retail sales, though bellwether Wal-Mart Stores Inc. posted only a 2.8 percent gain in stores open at least a year. Retail analysts were expecting a 3 percent gain. Wal-Mart nonetheless rose $1.78 to $56.26.

Cell phone equipment maker Qualcomm Inc. tumbled $1.80 to $38.07 as the company issued a lower profit outlook for the upcoming fiscal year. Qualcomm saw a 35 percent jump in profits for its fourth quarter, meeting analysts’ expectations.

Qwest Communications International Inc. swung to a loss in the third quarter due to lower revenues and one-time charges. Even without the charges, Qwest missed Wall Street forecasts by a penny per share. Qwest climbed 17 cents to $3.58.

A $3.5 billion write down in assets pushed long-distance carrier MCI Corp. into a loss, although without the charge, the company would have posted a profit of 16 cents per share, beating Wall Street estimates of 5 cents per share. A drop in quarterly revenue was offset by a larger drop in operating costs. MCI was up 51 cents at $17.76.

Drug store chain CVS Corp. climbed $2.52 to $46.90 as the company beat analysts’ profit forecasts by 3 cents per share. The company reported lower profits from a year ago as it absorbed the acquisition of rival Eckerd’s drug stores and its mail order pharmacy business.

Overseas, Japan’s Nikkei stock average rose 0.5 percent. In Europe, Britain’s FTSE 100 closed up 0.2 percent, France’s CAC-40 fell 0.2 percent for the session and Germany’s DAX index gained 0.1 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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