Dow industrials up 128 on sharp drop in oil prices

October 20, 2005

NEW YORK -- Stocks soared yesterday, with the Dow Jones industrials gaining 128 points as a sharp drop in crude oil prices and a reassuring assessment of the economy helped investors overcome their disappointment over Intel Corp.'s earnings and troubling sales forecasts.

"There are some signs on the wall here that we may have hit the bottom of this market, and we could be ready to move up," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati.

"The big question, though, is how far we move up and how long it lasts," he added.

The Standard & Poor's 500 index climbed 17.62, or 1.5 percent, to 1,195.76, while the tech-focused Nasdaq composite index added 35.24, or 1.71 percent, to 2,091.24. The Dow rose 128.87, or 1.25 percent, to 10,414.13.

Advancing issues outnumbered decliners by nearly 2-to-1 on the New York Stock Exchange, where consolidated volume came to 2.7 billion shares, compared with 2.27 billion shares traded Tuesday.

The Russell 2000 index of smaller companies rose 12.92, or 2.07 percent, to 638.28. The Dow-Jones Wilshire 5000 composite index, the broadest measure of U.S. shares, rose 170.21, or 1.45 percent, to 11,919.47.

The Sun-Bloomberg index of the top stocks in Maryland rose 4.08 to 318.63.

Legg Mason Inc. rose $3.07 to $104.67.

Marriott International Inc. rose $2.67 to $61.77.

Intel's revenues were below Wall Street's forecasts despite strong laptop computer sales. But it was the fourth-quarter outlook, which included warnings of slower sales, that caused nervous investors to sell off the stock, which was down sharply in early trading but finished the session down just 3 cents at $23.69.

The disappointment over Intel was mitigated by other positive earnings reports in the technology sector.

Yahoo Inc. jumped $2.21 to $35.91 after beating analysts' profit expectations by a penny per share on a 47 percent jump in sales.

Overseas, Japan's Nikkei stock average fell 1.66 percent; Britain's FTSE 100 closed down 1.83 percent; France's CAC-40 lost 1.93 percent, and Germany's DAX index tumbled 2.05 percent.

Bloomberg News and the Associated Press contributed to this report.

Stock of interest

Netflix Inc.

The company's third-quarter profit plunged 63.5 percent to $6.9 million as the online DVD rental service cut subscription prices while battling a stiff challenge from Blockbuster Inc.

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