(Corrects to show in paragraph 7 that shares of Merrill fell
in the prior session before the brokerage announced fresh
write-downs, not after the write-downs were announced.)
* Falling oil, U.S. consumer confidence boost stocks
* Amgen, Colgate-Palmolive, US Steel results top estimates
* Merrill rises, wiping out earlier losses after write-downs
* Nasdaq jumps 2.3 pct; Dow, S&P up about 1.8 pct
(Updates to afternoon, changes byline)
By Steven C. Johnson
NEW YORK, July 29 (Reuters) - U.S. stocks rebounded on
Tuesday, jumping more than 1 percent as falling oil prices and
rising consumer confidence soothed worries about the economy
and brightened the outlook for retailers and transportation
companies.
Stronger-than-expected quarterly profit from Amgen <AMGN.O>
and U.S. Steel <X.N> further boosted market confidence a day
after major indexes plunged by more than 2 percent.
Data showed U.S. consumers' mood improved in July, pushing
the confidence index up for the first time in six months and
offsetting another report showing U.S. home prices falling at a
record pace in May. For details, see [].
Combined with a $3 decline in oil, the confidence data
provided a glimmer of hope that the struggling U.S. economy may
be nearing bottom.
"I think with oil at around the $120 area, that is giving
the market a psychological uplift today" John Schloegel, vice
president of investment strategies for Capital Cities Asset
Management in Austin, Texas.
U.S. crude prices <CLc1> dropped $3.01, or about 2.4
percent, to $121.75 per barrel.
Shares of Merrill Lynch <MER.N> rose nearly 3 percent after
a slide of more than 11 percent in the prior session before the
brokerage announced fresh write-downs.
The Dow Jones industrial average <> was up 210.79
points, or 1.89 percent, at 11,341.87. The Standard & Poor's
500 Index <.SPX> was up 22.18 points, or 1.80 percent, at
1,256.55. The Nasdaq Composite Index <> was up 52.27
points, or 2.31 percent, at 2,316.49.
Lower oil prices helped retailers' and transportation
stocks, with the S&P retail index <.RLX> gaining 3.5 percent
and the airline index <.XAL> rising 11.6 percent, on track for
its best day in a week.
Some U.S. bank shares also rose. Analysts have noted that
weakening oil prices often spur a reversal of the popular short
financial/long energy trade.
The KBW bank index <.BKX>, which tracks stocks of 24 major
banks, gained 5.7 percent as Citigroup <C.N> shares erased
early losses to rise 2.3 percent to $17.83.
Merrill rose 2.4 percent to $25, reversing losses seen
after the brokerage said it will write down $5.7 billion and
raise $8.5 billion by selling new stock. Several analysts
widened their loss view for Merrill Lynch after the news.
[]
But other analysts have taken a "glass half-full" view,
saying the new write-downs may be a sign that banks are nearly
through purging balance sheets of bad mortgage debt.
Jim Awad, chairman of W.P. Stewart Asset Management in New
York, called it "a feeling that Merrill is working its way
through its problems."
Top performers included biotechnology company Amgen
<AMGN.O>, which jumped 3.1 percent to $62.35, driving the
Nasdaq higher, after the company reported a
higher-than-expected quarterly profit late on Monday and raised
its 2008 forecast. [].
Shares of Colgate-Palmolive <CL.N> climbed 7.8 percent to
$73.87 after the consumer products maker reported quarterly
earnings that beat Wall Street's estimates. []
U.S. Steel posted record second-quarter profits that easily
beat analysts' consensus forecast, sending its stock up 14.2
percent to $165.96.
Energy companies were the largest decliners on the S&P 500,
with ConocoPhillips <COP.N> losing 2 percent to $80.12.
(Additional reporting by Walter Brandimarte and Kristina
Cooke; Editing by Kenneth Barry)
