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NEW YORK: Wall Street roared higher for a second straight day on Thursday as oil prices tumbled further and the troubled banking sector extended its rebound on positive results from JPMorgan Chase.
The Dow Jones Industrial Average vaulted 207.38 points (1.85 percent) to close at 11,446.66, a day after a powerful rally of more than 2.5 percent.
The tech-heavy Nasdaq composite lifted 27.45 points (1.20 percent) to 2,312.30 and the Standard and Poor's 500 climbed 14.96 points (1.20 percent) to 1,260.32.
The S&P banking index was up some 8.7 percent, extending its recovery, after JPMorgan Chase, like Wells Fargo a day earlier, reported that its quarterly profits fell but not as much as feared.
Sentiment also was boosted by another sharp fall in crude oil prices.
New York's main oil contract, light sweet crude for August delivery, lost 5.31 dollar to close at 129.29 dollars a barrel. It has tumbled more than 15 dollars since Monday.
"Oil more than any other single item could be a positive catalyst for the market as lower energy costs would help to relieve pressure on consumers," said analyst Gregory Drahuschak at Janney Montgomery Scott.
The market was led by JP Morgan Chase, which reported a 53 percent drop in net profit from a year ago to 2.0 billion dollars which was comfortably above the Wall Street estimate and positive news for the banking sector ravaged by a housing crisis and credit squeeze.
"This rally may have legs that could extend for more than a couple of sessions if we continue to get a stream of better-than-expected earnings news from leading companies in sectors that had been under duress," said Fred Dickson, analyst at DA Davidson & Co.
"Wells Fargo's report yesterday and JP Morgan Chase's report this morning are good examples of banks delivering essentially lousy earnings but substantially beating estimates thereby sending a message that the situation in the financial sector isn't quite as bad as Wall Street previously feared."
JP Morgan Chase shares soared 13.5 percent to 40.80 dollars after its earnings report, leading the sector higher. Citigroup, due to report results Friday, added 9.1 percent to 17.97 while Bank of America rallied 16.9 percent to 26.50.
Fannie Mae and Freddie Mac extended their rebound from last week's near-meltdown that prompted a government rescue plan and the opening of the Federal Reserve discount window lending to the mortgage finance giants.
Fannie shares leapt 18 percent to 10.93 dollars and Freddie jumped 21.9 percent to 8.33.
Elsewhere, Coca-Cola shares lost 3.8 percent to 50.34 dollars after the beverage giant reported a 23 percent drop in quarterly profits due to special charges.
In the Internet space, Google fell 0.4 percent to 533.44 dollars ahead of its earnings report. After the bell, Google disappointed the market with a report showing a profit rise of 35 percent that was lower than most analyst forecasts. In after-hours trade, the shares were down some 10 percent.
Online auction giant eBay saw a 15.2 percent slide to 24.20 dollars on a weak outlook after reporting profits in line with most forecasts.
Bonds retreated. The yield on the 10-year US Treasury bond rose to 4.038 percent from 3.934 Wednesday and that on the 30-year bond increased to 4.638 percent from 4.582 percent a day earlier. Bond yields and prices move in opposite directions.
- AFP/so
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