"Stocks jump as crude takes a slide" by Associated Press | August 9, 2008
NEW YORK - Wall Street rebounded smartly yesterday, shooting higher as a surge in the dollar and another plunge in oil prices eased some of investors' worries about losses at mortgage finance company Fannie Mae. The Dow Jones industrials soared more than 300 points, more than wiping out a big loss from the previous session.
The session extended a streak of volatility on Wall Street that has seen triple-digit moves by the Dow become almost commonplace as investors react feverishly to any news about the financial sector, corporate earnings, and the economy.
Yesterday, the dollar, which has sagged along with the economy, reached its highest level against the euro since February, and in the process sent a wave of confidence through the stock market. And because the dollar's strength has contributed to the recent skid in oil prices, light, sweet crude dropped sharply again, falling $4.82 a barrel to settle at $115.20 on the New York Mercantile Exchange. That brought crude's decline over the past four weeks to more than $30.
Investors see the drop in oil as a big boost for the economy, because it should allow consumers to spend more freely. For the moment, that has allowed the market to set aside nervousness about the financial sector, which is still contending with the fallout from the year-old credit crisis.
Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis, said that while the strength in the dollar and the resulting drop in oil were attracting buyers, Wall Street's recent back-and-forth trading illustrates investors great anxiety.
The blue chips fell nearly 225 points Thursday after concerns about the financial sector, a weak showing by retailers in July, and a spike in weekly unemployment claims.
But with yesterday's gains, the Dow rose 408 points, or 3.6 percent, for the week. The dollar's rise against the euro came after the European Central Bank and the Bank of England separately left their benchmark interest rates unchanged Thursday. With the ECB signaling more rate hikes aren't likely, the euro wasn't as attractive as an investment option."
