- The Washington Times - Wednesday, February 8, 2006

NEW YORK (AP) — A drop in oil prices and strong earnings at PepsiCo Inc. and Cisco Systems Inc. propelled stocks higher yesterday, with the Dow Jones industrial average surging more than 100 points. Reports that Pfizer Inc. might sell its consumer-products business contributed to the advance.

Wall Street’s major indexes built momentum throughout the afternoon, climbing higher as the close neared. But with investors still concerned about interest rates, analysts viewed the market’s jump with caution.

“The market was a little oversold,” said Russ Koesterich of Barclays Global Investments. “I think [the run-up] is mostly technical. I don’t think you can read too much into it, since there weren’t a lot of drivers.”

Cisco, which closed up 7.2 percent, led technology and telecommunication stocks higher after its earnings exceeded analysts’ expectations. An upgrade of Dell Inc. also helped the tech sector.

Investors who had lost patience with drug maker Pfizer applauded news it was considering a sale or spin-off of the consumer business, which includes Listerine mouthwash, Visine eye drops and Lubriderm skin lotion. Its stock rose 5.7 percent.

The Dow rose 108.86, or 1.01 percent, to 10,858.62.

Broader stock indicators were higher. The Standard & Poor’s 500 Index rose 10.87, or 0.87 percent, to 1,265.65, and the Nasdaq Composite Index rose 22.02, or 0.98 percent, to 2,266.98.

The indexes moved sharply higher after the S&P; 500 pierced the 1,260 “resistance level,.” technical analysts said.

Sentiment also improved as crude oil prices declined for the second day. Crude oil settled at $62.55 a barrel, down 54 cents, in New York. Crude fell $2.02 Tuesday.

Bonds fell, with the yield on the 10-year Treasury note at 4.59 percent, up from 4.57 percent late Tuesday. The U.S. dollar rose against other major currencies.

Gold prices declined after hitting a 25-year high earlier this month.

Networking gear provider Cisco Systems rose $1.31 to $19.40 after its quarterly earnings, excluding one-time items, beat expectations. In its earnings report after the close Tuesday, the company said profits dropped, hampered by stock-option expenses, but sales rose on strong business orders.

Technology stocks were also helped by Sanford Bernstein’s upgrade of Dell Inc. to “outperform” from “market perform.” Analyst Toni Sacconaghi said the computer company’s business model “remains intact.” Dell rose $1.83, or 6.2 percent, to $31.52.

PepsiCo rose 42 cents to $57.28 after it reported earnings rose 13 percent. The company benefited from an extra selling week in the quarter and sales growth across its Frito-Lay, Quaker Foods and beverage operations.

Dow component Pfizer rose $1.43 to $26.37.

The Russell 2000 Index of smaller companies rose 3.98, or 0.55 percent, to 721.16.

Overseas, Japan’s Nikkei stock average fell 2.68 percent. Britain’s FTSE 100 lost 0.38 percent, Germany’s DAX Index slid 0.11 percent, and France’s CAC-40 fell 0.82 percent.

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