Stocks Rise as Energy Gains Offset Drop in Banks

A late-day surge left stocks with modest advances Thursday as a jump in the price of oil lifted energy companies and offset weakness in bank shares.

Trader Joseph Marando, foreground, works on the floor of the New York Stock Exchange Thursday, Oct. 15, 2009. (AP Photo/Richard Drew)

(AP)

The gains came a day after strong profit reports from JPMorgan Chase & Co. and Intel Corp. vaulted the Dow Jones industrials above the 10,000 level for the first time in a year. The Dow tacked on another 47 points.

Stocks spent most of the day lower but rallied in the final 15 minutes of trading ahead of quarterly reports from Google Inc., IBM Corp. and chip maker Advanced Micro Devices that arrived after the closing bell. All three topped expectations and could help the market extend its gains if reports due early Friday from General Electric Co. and Bank of America Corp. aren't spoilers.

Analysts say the market's late bounce signals investors are still looking to get into the market.

"People are trying to buy on the dips," said Andrew Neale, partner and portfolio manager at Fogel Neale Partners in New York. "There is so much money waiting on the sidelines."

A rise in oil prices to their highest level in nearly a year lifted energy stocks and, in turn, the overall market. Gains in companies like refiner Tesoro Corp. and Chevron Corp. helped offset losses in financial stocks after earnings from Goldman Sachs Group Inc. and Citigroup Inc. disappointed investors.

JPMorgan helped set a high bar for bank earnings, and investors didn't like as much what they heard from rivals Goldman and Citi. Goldman's net income of $3.19 billion beat expectations on strong trading profits, but investment banking revenues fell. Citigroup reported a smaller loss than expected but said credit losses remain high.

Investors drew some comfort from a government report that new unemployment claims fell more than expected last week.

"Things are going in the right direction but the fundamental economic improvement is slow," said Robert Dye, senior economist at PNC Financial Services Group in Pittsburgh.