Oil drop, Wells Fargo report spur stocks up

NEW YORK Wall Street at least temporarily shrugged off some of its many concerns yesterday and bounded higher thanks to a drop in oil prices.

The Dow Jones industrial average rose 276 points, or 2.5 percent, posting its best daily gain in three months.

The broader Standard & Poor's 500 index also gained 2.5 percent, while the technology-dominated Nasdaq composite index surged 3.1 percent.

Light, sweet crude fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, bringing its two-day decline to $10.58.

Investors also found relief in a decision by Wells Fargo & Co. to boost its dividend that helped counter some of the market's concerns about the health of banks.

Still, the Labor Department's report that consumer prices shot up in June at the second-fastest pace in 26 years reminded investors that inflation still poses a threat to economic growth.

Wells Fargo & Co. said its second-quarter earnings fell 22 percent as more customers at the nation's fifth-largest bank failed to repay loans. But the company's results beat Wall Street expectations, and investors were pleased by Wells Fargo's decision to raise its quarterly dividend to 34 cents from 31 cents. Wells Fargo rose $6.72, or 32.8 percent, to $27.23.

Delta Air Lines Inc. rose $1.24, or 26.6 percent, to $5.91 after reporting that high fuel prices led to a hefty second-quarter loss despite a strong increase in sales. The results topped Wall Street estimates, however, which excluded one-time items.