Stocks posted a very strong day today, with all the major indices participating in the rally. The Dow Jones Industrials climbed 266.48, or 2.4%, to 11,397.56, enabling it to wipe out yesterday’s loss of 2.1%. Nasdaq climbed 55.4 points to 2,319.62 and the S&P 500 index rallied for 2.3%, or 28.83 points, closing at 1,263.2.

Oil was the big catalyst, with stocks climbing as oil prices reversed course, after initially rising on news that rebels in Nigeria had damaged two Royal Dutch Shell pipelines, forcing the company to stop delivery of its Nigerian Bonny Light Crude until September. Crude oil for September delivery ended the day at $122.18, a $2.54 (2%) drop. This is the lowest closing price since May 6^th and a twenty five points drop from the all time high of $147.27 reached on July 11 this year. 

The dollar was also a factor after it rallied against other major currencies, as well as continuing lessening demand for gasoline. According to the Federal Highway Administration, The number of highway miles driven by Americans has dropped for seven consecutive months for the period ending in May, with a 3.7% decline for the month, when compared to May of 2007. According to the FHA, this is the longest continued decline since 1979.

Earlier in the trading day, The Conference Board released a report that showed consumer confidence rose to 51.9 in July from 51 in June. With consumers the major driver of the economy, this was well received news.

Financials were very willing participants in the rally, with the shot in the arm coming from Merrill Lynch (MER), which announced that it was selling some of the asset backed Collaterized Debt Obligations it held on its balance sheet as well as raising $8.55 billion in a stock offering.

Some of the individual financial stocks that moved the market: