November 5, 2004


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

I'm not in the tin-foil hat crowd but the high price of oil, well above the $30-35/barrel range supply and demand would put it, led me to think someone was playing games in the futures market. The quick drop in oil prices after the election will only spur this type of thinking.

And yes it is nice that Bush will be able to claim credit for the recovery. It was very annoying watching Clinton taking credit for the recover in '93 and '94 which had begun under Bush I.

Posted by: AWW at November 5, 2004 9:56 AM


Posted by: Genecis at November 5, 2004 11:51 AM

If the Democrats want to "make things bad", as some have said (Richard Cohen, etc.), their secret weapon might just be Eliot Spitzer. Someone in Washington, like William Donaldson, Richard Shelby, or whoever replaced Tauzin on the Commerce Committee, had better take notice. Perhaps it is time for Pataki to publicly rebuke Spitzer.

Posted by: jim hamlen at November 5, 2004 11:54 AM

I generally haven't much time for conspiracy theories, but the price of gas here dropped 20% Wednesday morning to the lowest in many months.

Posted by: Peter B at November 5, 2004 12:56 PM