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NEW YORK: The major US stock markets ended higher on Monday as oil prices declined, giving some slight relief to inflation fears, and as Cablevision announced it was buying the New York daily Newsday.
Stocks gained momentum during afternoon trading as oil prices declined. A key oil contract traded in New York slumped by over one dollar to 124.23 dollars a barrel from Friday, although crude prices still remain close to historical highs.
The Dow Jones Industrial Average jumped 130.43 points (1.02 percent) to close at 12,876.31.
The tech-rich Nasdaq composite finished up 42.97 points (1.76 percent) at 2,488.49 while the broad-market Standard & Poor's 500 index gained 15.30 points (1.10 percent) to close at 1,403.58.
Investors reacted favourably to tumbling oil prices as fears eased somewhat that US economic growth, which is already reeling from a lingering housing market slump and a related credit squeeze, could be further harmed by inflationary pressures.
"The drop in crude prices helped ease some fears, considering crude closed at an all-time high in each of the five previous sessions," analysts at Briefing.com said.
Some analysts said oil prices had in part been pushed lower on Monday as the dollar gained some strength on global currency markets. International oil prices are quoted in dollars.
Market participants said Cablevision's bid to take over Newsday in a 650-million-dollar deal had also given investor sentiment a boost.
Cable operator Cablevision is buying Newsday from the Tribune Company media group which will retain a small three percent ownership stake in Newsday after the deal is completed.
Cablevision's shares ended 1.8 percent lower at 24.52 dollars.
Tribune is a privately held company whose media empire includes the major US newspapers the Los Angeles Times and the Chicago Tribune. The company was bought last year by real-estate billionaire Sam Zell and has significant debt repayments it needs to service.
In other corporate news, bond insurer MBIA reported a first quarter net loss of 2.4 billion dollars.
MBIA said the loss was mainly tied to "impairments" linked to complex securities which have been weighed down by the credit crunch that continues to roil US financial markets.
The bond insurance giant's stock closed up 4.5 percent at 9.85 dollars.
Market participants said they were awaiting a flurry of economic and corporate news which is due to be released in coming days, including a snapshot on April retail sales and Wal-Mart's latest quarterly earnings.
Economists are pouring over retail sales reports for clues on the health of US consumers who have been buffeted by the housing and credit woes.
Most analysts expect the government to report on Tuesday that April retail sales - a critical driver of overall economic activity - were flat after sales ticked up 0.2 percent in the prior month.
Investors said they are also awaiting the latest earnings news from retail titan Wal-Mart which is due to release its quarterly results on Tuesday.
Wal-Mart's stock finished up 1.5 percent at 58.02 dollars.
Bond prices were lower to flat. The yield on the 10-year US Treasury bond rose to 3.775 percent from 3.767 percent on Friday while that on the 30-year bond showed little change at 4.522 percent from 4.524 percent.
Bond yields and prices move in opposite directions.
European markets also posted gains as oil prices retreated. London's FTSE 100 index gained 0.26 percent to close at 6,220.60 points, while in Paris the CAC 40 rose 0.32 percent to 4,976.21 and Frankfurt's Dax finished up 0.47 percent at 7,035.95. - AFP/de
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