- The Washington Times - Monday, February 27, 2006

NEW YORK (AP) — Tumbling oil prices and strong earnings from home improvement retailer Lowe’s sent stocks higher yesterday as investors regained optimism about corporate profits and the economy.

A bullish outlook and better-than-expected fourth-quarter results from Lowe’s soothed investors’ concerns that earnings would decline as the economy slowed through the year.

Oil prices tumbled after surging Friday as a knee-jerk response to a foiled terrorist attack in Saudi Arabia. A barrel of light crude settled at $61, down $1.91, on the New York Mercantile Exchange.

Analysts noted that the buying came after the markets turned in a mixed but promising performance last week despite increasing economic uncertainty and the terror attack, which points to strong investor enthusiasm for stocks.

“I think this is one of those times where it’s hard to be bearish,” said Chris Johnson quantitative analyst at Schaeffer’s Investment Research in Cincinnati.

The Dow Jones Industrial Average rose 35.70, or 0.32 percent, to 11,097.55.

Broader stock indexes also rose. The Standard & Poor’s 500 Index added 4.69, or 0.36 percent, to 1,294.12. The Nasdaq Composite Index gained 20.14, or 0.88 percent, to 2,307.18.

The Russell 2000 Index of smaller companies rose 4.03, or 0.55 percent, to 740.63, a record high for the index.

Bonds slipped, with the yield on the 10-year Treasury rising to 4.59 percent from 4.58 percent late Friday. The dollar was mixed, while gold prices fell.

Weak data on housing crimped related stocks, with the news, with Toll Brothers falling 69 cents to $32.65 and D.R. Horton dropping 87 cents to $35.23.

However, Lowe’s jumped $3.78, or 5.8 percent, to $69.30 after reporting earnings that beat forecasts by 7 cents per share. The company also issued a very strong outlook.

Walt Disney added 40 cents to $28.38 after a report in Barron’s suggested that the media conglomerate could be purchased by Apple Computer now that Apple founder Steve Jobs sits on Disney’s board as its largest individual shareholder. Apple fell 47 cents to $70.99.

Merrill Lynch & Co. Inc. rose $1.12 to $77.88 after the Wall Street firm said it would increase its share repurchase program by $6 billion.

Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange.

Japan’s Nikkei stock average rose 0.57 percent. Britain’s FTSE 100 closed up 0.26 percent, France’s CAC-40 added 0.13 percent, and Germany’s DAX Index gained 0.76 percent.

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