NEW YORK U.S. stocks rallied, erasing Monday's tumble, sparked by the biggest advance in U.S. Steel Corp. in seven years and falling oil prices.
U.S. Steel climbed 14 percent, sending steelmakers to their best gain since 2002, after net income more than doubled on higher prices. McDonald's Corp. and General Motors Corp. jumped as crude oil slid almost $3 a barrel. Financial shares rose for the first time in four days, led by Bank of America Corp. and JPMorgan Chase & Co., as Merrill Lynch & Co.'s plans to sell $8.5 billion of stock and liquidate $30.6 billion of bonds bolstered speculation that Wall Street is overcoming failed subprime bets.
The following companies had unusual price changes in U.S. trading.
Oil and natural gas exploration and production companies in the Standard & Poor's 500 index fell 2.9 percent as a group to the lowest since February as the commodity prices declined. Drilling companies in the index dropped 1.9 percent to the lowest since April. Crude prices slid to the lowest since May 6, and gas declined to an almost four-month low.
Range Resources Corp., a producer of natural gas from rocky deposits, sank 4.3 percent to $50.23. Apache Corp., an oil and natural gas producer with operations on five continents, lost 3.5 percent to $107.63. Noble Corp., the third-largest U.S. offshore oil driller, retreated 3.9 percent to $51.31.
Airlines surged as fuel prices tumbled. UAL Corp., parent of United Airlines, gained 21 percent to $8.51. AMR Corp., owner of American Airlines, rose 19 percent to $9.48. US Airways Group Inc. was up 16 percent to $4.85.
Bond insurers jumped after Security Capital Assurance Ltd. reached an agreement to tear up almost $4 billion in contracts guaranteeing the repayment of collateralized debt obligations backed by subprime mortgages. RAM Holdings Ltd. said it was released from obligations on $3.5 billion of securities assumed from Security Capital.
Security Capital rose 61 percent, the most since Jan. 23, to 84 cents. RAMR surged 36 percent, the most since it went public two years ago, to $1.26.
MBIA Inc., the largest bond insurer, increased 15 percent to $4.92. Ambac Financial Group Inc., the second-biggest, gained 21 percent to $2.11.
From news service reports
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Story Source: Record, The; Bergen County, N.J.
