Dow Posts 4th-Largest Point Gain

Wall Street stocks had their fourth-largest point gain in history Monday, and crude oil fell to its lowest level in five months as OPEC ministers agreed to boost production, setting off fears the market will be choked with supply.

The dollar rose to a 5 1/2-year high against the Japanese yen as calm returned to Asian markets.

The Dow Jones industrial average roared up to the 8,000 level for the first time in nearly six weeks, gaining 189.98 points, or 2.4%, at 8,013.11, its fourth-biggest point gain ever.

In the broader market, advancing issues led declines by a 2-1 margin in heavy trading, with many investors returning from a four-day Thanksgiving break after skipping Friday’s abbreviated session.

The Nasdaq composite index rose 30.17 points to 1,630.72 but still sat about 215 points from record terrain.

The Standard & Poor’s 500-stock list rose 19.37 points to 974.77, less than 9 points shy of record territory; and the NYSE composite index rose 8.63 points to 507.73, moving within 7 points of a new high.

Shares of smaller companies failed to keep pace. The Russell 2000 index rose 4.24 points to 434.16.

In commodities trading, meanwhile, oil futures fell sharply on concerns that OPEC’s decision to raise its production ceiling will create a glut on world markets. Gasoline and heating oil futures also dropped.

The contract for January crude oil fell 49 cents to settle at $18.66 a barrel on the New York Mercantile Exchange, down from Friday’s close of $19.15.

The 11-nation Organization of Petroleum Exporting Countries, meeting in Jakarta, Indonesia, agreed over the weekend to boost its official production ceiling to 27.5 million barrels a day, up from 25.033 million.

Many members of the group were already exceeding their individual quotas, so actual production will not increase by that much. OPEC exports more than a third of the world’s oil.

The U.S. Department of Energy said it expects the hike in the production ceiling to increase the group’s oil output by 500,000 barrels a day, reducing oil prices in the short term.

“This should lead to a near-term decline in oil prices, but not a collapse in oil prices,” the DOE’s Energy Information Administration said in a analysis of OPEC’s new production level.

Also pushing down crude oil prices were indications that Iraq may soon be allowed to sell more oil under the United Nations’ oil-for-food program.

Banks, financial services and technology surged as Wall Street tensions about the recent currency turmoil in Asia faded. Tokyo and Hong Kong stock markets both rose more than 2%, setting off big gains in European markets.

Investors also cheered benign economic news that showed the U.S. economy is sailing along, with inflation in check.

“The gains are really being led by a big euphoria rally for banks,” Christine Callies, chief investment strategist for Credit Suisse First Boston, said.

The National Assn. of Purchasing Management’s manufacturing index for November was a less-than-expected 54.4 points. Construction spending in October rose by a weaker-than-anticipated 0.1%.

The yields of inflation-sensitive U.S. bonds hovered near 21-month lows after the manufacturing report, which suggested the economy is growing slowly enough to keep inflation at bay.

The price of the benchmark 30-year Treasury bond rose, with its yield falling to 6.03% from 6.05% on Friday.

Among Monday’s highlights:

* The Dow’s biggest gainers were J.P. Morgan, which rose $6.56 to $120.75; American Express, which rose $3.81 to $54.06; Travelers Group, which rose $3.19 to $54.06; and IBM, which rose $3.06 to $112.56.

* Technology issues benefited from a rebound in Asia. Compaq Computer rose $3.56 to $66; Intel rose $3.88 to $81.50; Cisco Systems rose $4.19 to $90.44; and Dell Computer rose $5.88 to $90.06.

* Oil-related shares were among the few industry groups in the S&P; 500 to drop. The decline affected stocks in all aspects of the business, from big oil companies to explorers to drillers. Amoco lost $1.75 to $88.25; Texaco fell $1.63 to $54.88; and Mobil lost $1 to $70.94.

Oil-service stocks, which doubled from February to November, continued to tumble. Schlumberger fell $4.25 to $78.06. Cooper Cameron fell $3.69 to $57.25 and Smith International fell $4 to $60.

* Airline shares benefited from the decline in oil prices. AMR rose $6.25 to $127.56; UAL gained $5 to $90; Delta Air Lines gained $4.56 to $116.

In currency trading, the dollar topped 129 yen for the first time since May 1992, and zeroed in on the psychologically important 130 level, dealers said. But it ended in New York at 128.91, up from 127.82 Japanese yen Friday.

Fueling the surge past last week’s five-year high at 128 yen was new selling in the South Korean won. The won hit a record low against the dollar, pressuring the yen as negotiations for an international bailout of South Korea, the world’s 11th-largest economy, dragged on, dealers said.

However, after trading ended Monday, South Korea said it reached an initial agreement with the International Monetary Fund on a loan package that would require Seoul to liquidate troubled banks and lower economic growth.

On overseas exchanges, Tokyo’s 225-share Nikkei average closed at 17,007.59, up 371.33 points, or 2.23%. Hong Kong’s Hang Seng index closed at 10,750.88, up 223.96 points, or 2.13%. London’s FTSE-100 closed at 4,921.8, up 90 points, or 1.86%.

Market Roundup, D12

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Good News at the Pump Soon?

Oil Prices tumbled Monday, helping to boost Wall Street. January crude oil futures in New York fell 49 cents to $18.66 a barrel, the lowest since June, after OPEC voted to raise output. Gasoline futures also fell. (Investor Spotlight, D13) Oil futures’ weekly closes, and latest:

Monday: $18.66

Source: Bloomberg News