Reduced oil prices raise stocks

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NEW YORK — The stock market notched its second straight daily advance yesterday, with investors assuaged by a pullback in oil prices and some better-than-expected economic data.

Wall Street has been worried about cash-strapped consumers paring back their spending, so it was pleased the energy markets gave up early gains that briefly drove crude oil above $125 a barrel.

In other positive signs, the Philadelphia Federal Reserve said regional manufacturing activity is contracting this month at a much slower pace than in April, while major companies such as General Electric Co. and CBS Corp. are making deals.

Fears of an ongoing credit-market paralysis have eased significantly. Federal Reserve Chairman Ben S. Bernanke said in a speech in Chicago he is "encouraged" by recent efforts by banks to raise cash — a trend that is helping to relieve the credit crisis.

But Alan Gayle, senior investment strategist for RidgeWorth Capital Management, said, "what we're left with now are cyclical credit strains. And those are likely to linger for a while."

The Dow Jones Industrial Average rose 94.28, or 0.73 percent, to 12,992.66.

Broader stock indicators advanced more than 1 percent to their highest closing levels since Jan. 3. The Standard & Poor's 500 Index rose 14.91, or 1.06 percent, to 1,423.57, and the Nasdaq Composite Index rose 37.03, or 1.48 percent, to 2,533.73.

The technology-laden Nasdaq got a boost from Intel Corp., which rose $1.13, or 4.7 percent, to $24.97 after a Lehman Brothers analyst lifted his price target on the chip maker, citing strong product demand.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.92 percent late Wednesday.

The dollar was lower against most other major currencies, and gold prices climbed.

In other economic data, the Fed said nationwide industrial output sank for the second straight month in April by 0.7 percent, due to big cutbacks in the automotive and other manufacturing industries. The drop was more than double analysts' average prediction.

In deal-making news, CBS agreed to buy online technology news and entertainment company CNet Networks Inc. for about $1.75 billion. The owner of the CBS television network and TV stations said the deal will boost its online presence and allow it to tap the growing market for online advertising.

CBS fell 59 cents, or 2.4 percent, to $24.23, while CNet rose $3.47, or 44 percent, to $11.42.