WELCOME TO THE SUNRISE SIDE OF THE MOUNTAIN:

Plunge in Crude Oil Prices Bolsters Wall Street Rally (Josh Friedman and Elizabeth Douglass, November 5, 2004, LA Times)

Wall Street's postelection rally gained yardage Thursday, fueled by a sharp drop in crude oil prices.

The Dow Jones industrial average climbed more than 177 points — its biggest one-day advance in more than a year — while the broader Standard & Poor's 500 index of blue-chip stocks closed at its highest point since March 2002.

The two biggest drags on the stock market this fall have been uncertainty over the presidential election and rising crude prices, analysts say. Investors are flocking back to Wall Street, they say, in the wake of President Bush's reelection and a recent slide in oil prices. On Thursday a barrel of crude dropped $2.06 to $48.82 in New York trading.

"There was a certain amount of money on the sidelines pending the outcome of the election, and that doesn't get put to work all in one day," said Kevin Marder, a strategist at Ladenburg Thalmann Asset Management in Los Angeles.

"But the price of crude," he said, "had been holding the stock market back even more than the election uncertainty."

The Dow rose 177.71 points, or 1.8%, to 10,314.76, adding to its 101-point gain Wednesday, when Bush was declared the winner. The S&P 500 rallied 18.47 points, or 1.6%, to 1,161.67 for its eighth gain in a row — the index's longest winning streak in more than a year.

The technology-heavy Nasdaq composite climbed 19.30 points, or 1%, to 2,023.63, its highest close since June 30.

An economy with its confidence finally restored for the first time since 9-11, Arafat dead, Iraqi elections in January, a likely Supreme Court appointment, increased majorities in both houses of Congress--the fundamentals could hardly be better for a rapid start to the Second Term.

Posted by Orrin Judd at November 5, 2004 9:29 AM