Oil retreat sets stocks free

NEW YORK — Wall Street has — at least for the moment — shrugged off some of its many concerns and bounded higher Wednesday, thanks to a drop in oil prices.

The Dow Jones industrial average rallied 276.74, or 2.5 percent, to close at 11,239.28, its biggest jump in more than three months. That reversed Tuesday's trend, when stocks ended mostly lower on continuing worries about the financial sector and the Dow logged its first close below 11,000 since July 2006.

Microsoft, one of the 30 Dow stocks, soared $1.11 Wednesday to close at $27.26. Boeing, also a Dow stock, gained $1.70 to $65.58.

Broader stock indicators also rose after fluctuating in the early going. The Standard & Poor's 500 index advanced 30.45, or 2.5 percent, to 1,245.36, and the Nasdaq composite index rose 69.14, or 3.1 percent, to 2,284.85.

Investors were relieved when crude fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange. That brought oil's two-day plunge to more than $10.

Investors also found relief in a decision by Wells Fargo to boost its dividend that helped counter some of the market's concerns about the health of banks. The bank's move, along with its tamer-than-expected profit decline, was seen as a bullish sign for the troubled sector.

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. And Wall Street remains uncertain about the economy and specifically the financial sector. This week has brought fresh attention to potential trouble spots in the mortgage market. Fannie Mae and Freddie Mac, the government-chartered mortgage financiers, are still a concern, as are regional banks that could have bad mortgage debt.

But, for the moment, investors were pleased by the drop in oil from record levels.