US stocks rose for the first time in three days as a rebound in oil from a 16-month low bolstered speculation that the global economic slump won't worsen.
Exxon Mobil and Chevron rallied more than 8% on expectations OPEC will trim output to stem a slide in crude prices. The Dow Jones Industrial Average recovered from a 276-point drop that sent it below its lowest close since April 2003 as Boeing and AT&T climbed more than 6%. Amgen, the world's largest biotechnology company, jumped 12% on profit that rose fivefold and an increased forecast.
The Standard & Poor's 500 Index rebounded from a 5 1/2-year low, gaining 11.33 points, or 1.3%, to 908.11. The Dow rose 172.04, or 2%, to 8691.25. The Nasdaq Composite Index slipped 11.84, or 0.7%, to 1603.91.
''There are whole segments of stocks moving in the same direction, if not the same magnitude, as oil,'' said Janna Sampson, co-chief investment officer at Oakbrook Investments, which manages $US1.2 billion. ''It's serving as a proxy for the health of the broader global economy.''
The earlier retreat in stocks was led by financial and consumer shares after home foreclosures surged to a record and the credit crisis hammered earnings at asset-management and real-estate companies.
The S&P 500 closed at the lowest level since April 2003 and oil futures touched the lowest since June 2007 yesterday on concern a deepening global economic slump will damp profits.
Emerging Markets Tumble
An index of emerging-market stocks slid 3.7% today and developing nations' borrowing costs neared a six-year high after S&P threatened to cut Russia's debt ratings as the global credit crisis deepened. Russian stocks tumbled to a three-year low.
Exxon Mobil, the largest oil company, added $US5.82 to $US70.39. Chevron, the second-biggest US energy producer, advanced $US5.03 to $US66.77.
The S&P 500 Energy Index climbed 6.6%, rebounding from a 10% tumble yesterday. The group is trading for 6.5 times estimated earnings for the next 12 months, near the lowest valuation since Bloomberg began tracking the data.
Crude oil for December delivery rose 1.6% to settle at $US67.84 a barrel on the New York Mercantile Exchange, then climbed to $US69.20 in after-hours electronic trading. Prices are down 20% from a year ago.
'Still Need Energy'
''For a certain level of base economic activity, we still need to consume energy,'' said Erick Maronak, the New York-based chief investment officer at Victory Capital Management, which oversees $US63 billion, including National Oilwell Varco. ''Everything has a clearing price, and we may be hitting that in the energy sector right now.''
National Oilwell Varco, the biggest US maker of oilfield equipment, climbed 9.4% to $US26.78 after its profit increased 50%, topping analysts' estimates, as customers increased spending on rigs and supplies.
Dow Chemical, the largest US chemical company, added 10% to $US24.43 as earnings beat projections on higher prices for latex and plastics used in packaging.
Amgen gained $US5.85 to $US55.55 for the biggest advance in the S&P 500. The world's largest biotechnology company said third- quarter profit advanced as sales of anemia drugs increased. The company forecast full-year earnings of at least $US4.45 a share, topping the average estimate of $US4.37 by analysts in a Bloomberg survey.
Citrix Systems climbed 11% to $US22.12. The maker of computer-networking software said, excluding some items, it expects to earn 43 cents a share in the fourth quarter. That beat the average analyst estimate by 16%.
Volatile Month
The S&P 500 has moved more than 1% on 14 of the 17 trading days this month, making it the most volatile by that measure since September 1932, according to S&P analyst Howard Silverblatt. Stock prices are gyrating as investors weigh government efforts to unlock credit markets with growing concern that the global economy is headed for a recession.
MGIC Investment slumped 35% to $US2.71 for the biggest drop in the S&P 500. The company eliminated its dividend today after five quarters of losses. Fox-Pitt Kelton Cochran Caronia Waller cut its rating on the shares to ''in line'' from ''outperform'' on concern the company will forced to raise capital.
Goldman Sachs was the biggest drag on financials, falling 5.3% to $US108.58. The New York-based securities firm that plans to convert into a bank may cut about 3200 jobs, or 10% of its workforce, said a person briefed on the plans who declined to be identified.
Housing Slump
Pulte Homes retreated 18% to $US8.11 and led a gauge of 15 homebuilders to a seven-year low after chief executive Richard Dugas said the US housing market worsened in the third quarter and urged the government to pass a tax credit for homebuyers to spark demand.
Banks and builders also retreated as a report showed home foreclosures climbed 71% in the third quarter. A total of 765,558 US properties got a default notice, were warned of a pending auction or were foreclosed on in the quarter, RealtyTrac, an Irvine, California-based seller of default data said. Rick Sharga, executive vice president of marketing for RealtyTrac, said he wouldn't be surprised if foreclosures continue to increase.
Money Managers
An S&P index of money managers slid as much as 8.2% with 14 of 16 of its companies declining after two investment management firms reported lower earnings stemming from this year's stock-market rout. The group pared its drop to 1.2% in the afternoon as the market climbed higher.
Franklin Resources, manager of the Franklin and Templeton mutual funds, tumbled 10% to $US55.74 after fiscal fourth-quarter earnings fell 30%. Janus Capital Group lost 17% to $US8.61 following a 49% decline in third-quarter earnings.
Losses stemming from the collapse of the US subprime mortgage market have surpassed $US650 billion globally, prompting the US and at least 10 European countries to inject capital into their banking systems to resuscitate lending.
A key gauge of banks' willingness to lend, the London interbank offered rate for dollars, has declined over the past two weeks, indicating the measures are working to some degree. Three-month Libor held at 3.54%, down from 4.82% on October 10. During the six months through September 15, the rate ranged from 2.54% to 2.92%.
Coca-Cola Enterprises fell 18% to $9. The world's largest soft-drink distributor lowered its profit forecast for the year after third-quarter sales of cold bottled drinks in North America fell. Coca-Cola, which owns 35% of Coca-Cola Enterprises, was the biggest drag on the Dow average, falling 5.1% to $43.06.
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