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NEW YORK - The Dow industrials rose for an eighth straight session today, the longest winning streak in four years, as a rebound in oil prices lifted energy shares and Citigroup gained on expectations of big job cuts.
Reports that Citigroup Inc. will cut at least 15,000 jobs lifted the No. 1 US bank's shares 1.6 per cent, supporting the Dow and S&P indexes.
Crude oil prices resumed their climb and helped lift energy companies' shares following Tuesday's rout in oil futures, with Exxon Mobil Corp. and Chevron Corp. boosting the Standard & Poor's 500 index.
"It seems there is a general feeling that we have had our correction and all is well, though I think we will face something of a psychological test as we get earnings reports in the next few days," said Michael Metz, chief investment strategist at Oppenheimer & Co.
The Dow Jones industrial average rose 4.71 points, or 0.04 per cent, to end at 12,573.85. The Standard & Poor's 500 Index gained 3.78 points, or 0.26 per cent, to 1,448.39. The Nasdaq Composite Index advanced 8.43 points, or 0.34 per cent, to 2,477.61.
The major US indexes have retraced most of their losses from late February.
But gains were kept in check due to caution ahead of the earnings season, which Alcoa Inc. kicked off after Tuesday's closing bell. Alcoa reported income from continuing operations of 77 cents per share, matching analysts' average estimate, according to Reuters Estimates.
During the regular session, some investors also were reluctant to take positions ahead of the release of minutes from the last Federal Reserve meeting when they appeared to soften their stance on the possibility of raising interest rates in the future.
Citigroup stock rose 1.59 per cent to $52.40 on the NYSE.
Alcoa's shares inched up 0.09 per cent to US$34.90. Yesterday, Bear Stearns raised its forecasts for Alcoa, the world's largest aluminum company and a Dow component, and the industry in general.
The outlook for US earnings growth by S&P 500 companies has been scaled back in the past couple of weeks to a gain of 5.0 per cent compared with a year ago from an increase of 9.2 per cent estimated when the quarter began, according to Reuters Estimates.
Exxon Mobil was up 1 per cent at US$77.57 and Chevron added 2.05 per cent to US$77.04, a day after the S&P energy index hit a record, having found a base to mount a sustained rebound from its mid-March lows. The S&P energy index gained 6.63 points, or 1.40 per cent, to end at 479.94.
"The surprise is the strong performance of the whole energy sector. In my opinion, that shows there is a real underlying tone of inflation here, but for the moment, nobody seems to be paying any attention to it," Metz said.
US crude oil futures rose 38 cents to settle at US$61.89 per barrel, bouncing back from Monday's sell-off on forecasts that Wednesday's government inventory data will show further drops in domestic petrol and distillate supplies.
In another sign of the housing downturn, D.R. Horton Inc., the largest US home builder, said orders for new homes tumbled 37 per cent last quarter and noted that the spring selling season has begun more slowly than usual.
D.R. Horton shares slid 1.54 per cent to US$21.70.
Mortgage lenders were also down sharply on concern about the health of the housing market. Impac Mortgage Holdings Inc. lost 11.96 per cent to US$4.49 and Novastar Financial Corp. fell 4.1 per cent to US$4.91.
Overseas, shares extended their rise, pushing the broadest measure of global stocks to a lifetime high as markets in Asia and Australia rose to records.
Trading volume was well below average on the New York Stock Exchange, with about 1.33 billion shares changing hands. Last year's estimated daily average was 1.84 billion. On Nasdaq, about 1.89 billion shares traded, also below last year's daily average of 2.02 billion.
Advancing stocks outnumbered declining ones by a ratio of about 5 to 3 on the NYSE and by about 8 to 7 on Nasdaq.
- REUTERS