- The Washington Times - Thursday, August 7, 2008

NEW YORK | Wall Street logged another winning day Wednesday as a drop in oil prices and a better-than-expected profit report from technology bellwether Cisco Systems Inc. helped soothe the market’s worries about the financial sector.

Oil extended its slide into a third day. Light, sweet crude settled down 59 cents at $118.58 a barrel on the New York Mercantile Exchange after the government reported a jump in domestic inventories; oil is now down about $30 from its record high of $147.27 reached July 11.

Cisco rose more than 5 percent after the networking equipment company late Tuesday posted earnings that narrowly topped Wall Street’s forecast. Cisco rose $1.28, or 5.7 percent, to $23.93 after its report.

Investors began the day fearing more industrywide write-downs of bad home loans after mortgage financier Freddie Mac reported a larger-than-expected second-quarter loss. But a reversal in oil prices, continuing a decline that propelled stocks sharply higher Tuesday, helped calm investors about the forces tugging at the economy.

Lincoln Anderson, chief investment officer and chief economist at LPL Financial in Boston, said that while the troubles in the financial sector aren’t over, investors are somewhat emboldened by the slide in oil and signs of strength in the dollar.

“I think we’re getting into better territory. I’ve been very much focused on the fall in oil prices as a necessary ingredient to avoid recession. To the extent that we’re getting that, that’s just great,” he said.

The Dow Jones Industrial Average rose 40.30, or 0.35 percent, to 11,656.07, after having been down nearly 100 points early in the session. The gain brought the Dow’s two-day advance to about 370 points. The blue chips soared Tuesday with the drop in oil, and also in response to a reassuring economic statement from the Federal Reserve.

Broader stock indicators also advanced again Wednesday. The Standard & Poor’s 500 Index rose 4.31, or 0.34 percent, to 1,289.19, and the Nasdaq Stock Market rose 28.54, or 1.21 percent, to 2,378.37.

Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where consolidated volume came to a relatively light 4.77 billion shares, compared with 5.35 billion Tuesday.

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