U.S. stocks gain on oil price drop

Wednesday, July 9, 2008 at 1:44am

U.S. stocks rallied the most in a month yesterday, led by banks and transportation companies, after JPMorgan Chase & Co.’s chief executive officer said losses in credit markets will ease and oil posted its biggest drop since March.

Bank of America Corp. advanced the most since 1990, leading financial shares to their best gain in more than three months, after JPMorgan's Jamie Dimon said buyers are returning to some types of mortgage products.

United Parcel Service Inc. and Wal-Mart Stores Inc. climbed as crude tumbled more than $5 a barrel.

“Oil prices have had a stranglehold on the stock market for the last year or so and anyone that's a long-term equity investor needs to see oil prices come down,” said Jack Ablin, who helps oversee $65 billion as chief investment officer at Harris Private Bank in Chicago.

Eight of 10 industries in the S&P 500 advanced as the benchmark for U.S. equities pared its tumble from an October record to less than 19 percent, below the 20 percent threshold that signals the start of a so-called bear market.

The plunge in oil prices pushed energy shares in the index to the lowest level since May 1.

Crude oil for August delivery fell 3.8 percent to $136.04 a barrel in New York on concern that the global economy may slow further. Oil dropped almost $10 since reaching a record $145.85 a barrel on July 3.

—Bloomberg News

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