US stocks rose on Thursday as a 2 percent gain in oil prices boosted shares of Exxon Mobil Corp and other energy companies while data showing moderate inflation lifted optimism about the economy. Exxon's stock led the major advancers in the S&P 500 as crude rose on gasoline supply concerns.
A day after the biggest gain in the Dow industrials in almost a year, stocks drew support from a government report that showed a modest rise in the May Producer Price Index excluding food and energy costs. The data supported the notion inflation is in check even as the economy grows.
"What investors are starting to incorporate is the thought that the economy might be accelerating and that the first quarter truly was the worst quarter of the year," said Paul Nolte, director of investments at Hinsdale Associates, in Hinsdale, Illinois.
"Investors are still interested in stocks and are willing to buy a dip in the market." The Dow Jones industrial average gained 71.38 points, or 0.53 percent, to end at 13,553.73. The Standard & Poor's 500 Index added 7.30 points, or 0.48 percent, to finish at 1,522.97. The Nasdaq Composite Index advanced 17.10 points, or 0.66 percent, to 2,599.41.
Exxon shares rose 1.7 percent to $84.77 on the New York Stock Exchange. On the New York Mercantile Exchange, July crude rose $1.39 to close at $67.65, the highest settlement since September 5, 2006.
Shares of General Motors Corp rose 4.7 percent to $33.60 after sources said GM and bankrupt auto parts maker Delphi Corp are "very close" to a deal with the United Auto Workers union that would help the supplier emerge from bankruptcy. GM was the Dow's second-biggest gainer, ranking only behind Exxon.
On the downside, Goldman Sachs Group Inc shares dropped 3.4 percent to $225.75 as the investment bank's quarterly earnings disappointed investors. Bear Stearns Cos., one of the largest US mortgage bond underwriters, said quarterly profit fell by a third. Its stock ended up 0.07 percent at $149.60.
Besides energy, investors snapped up shares of transportation companies and big manufacturers, among the biggest beneficiaries of a growing economy. Plane maker Boeing Co's stock rose 0.5 percent to $98.97, while shares of heavy equipment maker Caterpillar Inc gained 1 percent to $80.73.
Diversified manufacturer General Electric Co added 0.4 percent to $37.80 on the NYSE. The Dow Jones Transportation Average was up 1.5 percent, as shares of package Delivery Company United Parcel Service Inc rose 2.5 percent to $73.95. Telecommunications company AT&T was another standout, jumping 1.5 percent to $40.56 after Bear Stearns raised its price target on the stock.
Verizon's price target was raised to $50 per share from $43 by HSBC, sending the stock up 0.8 percent to $43.22. On the Nasdaq, Apple Inc contributed the most to its gain. Apple's stock rose 1.1 percent to $118.75 on optimism about the company's upcoming iPhone, which will be sold by AT&T.
Trading was moderate on the NYSE, with about 1.45 billion shares changing hands, below last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.00 billion shares traded, below last year's daily average of 2.02 billion. Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on the NYSE and by about 3 to 2 on Nasdaq.
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