US stocks rallied on Monday as oil prices fell below $114 per barrel for the first time in more than three months, improving the outlook for consumer and business spending, and Amazon.com's shares jumped after a broker said a key product appeared to be selling well.
Apple jumped more than 3 percent on news of strong sales of iPhone software, giving a major lift to both the S&P 500 and the Nasdaq. AT&T Inc, the iPhone's exclusive carrier in the United States, rose nearly 3 percent, becoming the biggest boost on the S&P 500.
Also helping the Nasdaq rise nearly 2 percent was a 10-percent jump in shares of Amazon.com Inc. In a research note, Citigroup said the company's Kindle book reader appears to be selling more than expected, on track to become one of the top electronics gifts of the 2008 holiday season, along with the new iPhone.
Bank shares also rose, with the KBW index for the sector rising nearly 4 percent, as the drop in oil prices reversed the popular trade of going long energy stocks, short the financial sector. "It is primarily oil and the dollar" pushing the market higher, said Doug Riley, senior portfolio manager with Boston Advisors, Inc. "You also have relatively light volumes, so any buying interest is pushing prices higher."
The Dow Jones industrial average rose 108.37 points, or 0.92 percent, at 11,842.69, while the Standard & Poor's 500 Index gained 14.13 points, or 1.09 percent, at 1,310.45. The Nasdaq Composite Index climbed 40.76 points, or 1.69 percent, at 2,454.86. Apple Inc's shares rose 3.3 percent to $175.24 after Chief Executive Steve Jobs told The Wall Street Journal that iPhone users had downloaded more than 60 million programs for the device in the month since Apple opened an online software marketplace.
Amazon.com Inc soared 11.6 percent to $89.88 after Citigroup's comments. Shares of Wal-Mart Stores Inc, the world's largest retailer climbed 2.8 percent to $59.49 as investors bet that the recent decline in oil prices lows will help consumer spending. Sysco Corp rose 4.5 percent to $31.23 after the food distributor reported stronger-than-expected quarterly results.