Markets Stage Broad Rebound

Crude oil prices surged above $30 a barrel Monday and gold hit a five-year high, but the action in those markets couldn’t keep Wall Street down.

The Dow industrials gained 193.69 points, or 2.3%, to 8,627.40, as buyers jumped in to take advantage of share prices hit by two weeks of sustained selling.

The stock market’s rally was broadly based, with winners outnumbering losers by 23 to 10 on the New York Stock Exchange and by 21 to 13 on Nasdaq.

The Nasdaq composite index rose 37.91 points, or 2.8%, to 1,400.33.

Investors had been chiseling away at stocks in the previous two weeks to take profits from the dramatic rally of October and early November, when the market was rebounding from five-year lows.

A new threat to the equity market’s health developed last week as oil prices began to rise sharply on concerns about supplies from strife-torn Venezuela.

On Monday, near-term crude futures in New York leaped $1.66 to $30.10 a barrel, the highest price since Oct. 2, as a general strike by workers in Venezuela entered its 16th day.

The unexpectedly long protest aimed at forcing President Hugo Chavez to resign compounded fears of an oil supply squeeze during the Northern Hemisphere winter -- concerns already heightened by possible military conflict in Iraq.

“Up to this point, the market seems to have been far too relaxed about the loss of so much crude oil at a time when inventories are already well below prudent levels,” said Paul Horsnell of investment bank J.P. Morgan Chase.

Venezuelan army commandos Sunday stormed an oil tanker and arrested its striking crew as Chavez tried to break the strike, which has paralyzed the nation’s exports.

More than 40 oil tankers were waiting anchored off Venezuelan ports Monday. The nation, which normally supplies 14% of U.S. oil imports, is pumping one-sixth of its normal volume.

In other commodity trading, gold continued its rally of the last two weeks. Near-term futures in New York added $3.80 to $337 an ounce, a five-year high.

Gold has benefited lately as stocks have pulled back and as the dollar has weakened against the euro and the yen. But Monday, the euro eased slightly against the dollar.

Wall Street’s resilience Monday in the face of oil’s strength may have been rooted in part in comments by Lehman Bros. and Goldman, Sachs & Co. Both firms advised European clients to increase the amount of U.S. shares they own, citing expectations that U.S. corporate profit growth in 2003 would exceed European profit growth.

Peter Oppenheimer, European equity strategist at Goldman Sachs, said European companies have done less to pare costs, and policymakers have been slower to cut interest rates, than their U.S. counterparts, according to Bloomberg News.

But European equity markets rallied as well Monday. The German market jumped 4.2% and the French market gained 3.2%.

As stocks advanced, U.S. Treasury bond prices fell and yields rose. The 10-year T-note ended at 4.15%, up from 4.07% on Friday.

Among Monday’s highlights:

* Bank and brokerage stocks were strong. Citigroup surged $1.48 to $37.48, Bank of America gained $2.03 to $70.28 and Merrill Lynch was up $1.12 to $40.97.

* Energy stocks got a lift as crude oil rallied. BP jumped $1.48 to $40.75, Valero Energy gained $1.90 to $37.06 and Occidental Petroleum was up 85 cents to $29.10.

* Drug giant Pfizer rose 55 cents to $31.05 after raising its quarterly cash dividend 15%. Eli Lilly added 38 cents to $64.85. Just as the market closed Monday, Lilly said it would raise its dividend 8%.

* In the tech sector, Broadcom jumped 88 cents to $17.11, Qlogic rallied $1.44 to $38.37 and Computer Sciences surged $1.93 to $34.84.

But Vitesse Semiconductor fell 4 cents to $2.38 and Conexant was off 2 cents to $1.63. They are among 15 stocks that Nasdaq plans to drop from the Nasdaq 100 index, that market announced Friday.

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Market Roundup, C7-8