The Nasdaq led a broader market advance Thursday after oil prices fell almost $5 a barrel on news from China that could mean less global demand and lower prices. The Dow industrials' gains were limited by Citigroup's warning that it will post significant second-quarter losses. The three major indexes were volatile throughout the session as investors considered the day's news, including a big drop in a U.S. manufacturing index. But stocks moved to the session's highest levels in the afternoon as oil prices retreated. Light sweet crude for July delivery fell $4.75 to $131.93 a barrel on the New York Mercantile Exchange after China said it will lift fuel subsidies on gasoline and diesel—a move that could reduce domestic demand and lower prices globally. U.S. average retail gasoline prices fell slightly, and the U.S. dollar rose versus the euro and the yen. Stocks have been under pressure this week as oil prices have hovered near new records, adding to concerns about inflation. Worries about the ongoing credit-market crisis also have been evident after Morgan Stanley and Goldman Sachs both reported big drops in quarterly profit. Also shaking the financial sector, two former Bear Stearns hedge-fund managers were arrested Thursday and face federal criminal charges related to the collapse of two funds that made bad bets on the subprime mortgage market. In economic news, the Philadelphia Fed index, a regional reading on manufacturing, weakened to negative 17.1 in June from negative 15.6 the May. Any negative figure shows contraction in the sector, which has declined for seven consecutive months. U.S. jobless claims fell slightly last week but stayed at levels that continued to reflect a struggling economy. In a third report, U.S. leading economic indicators rose slightly in May, but the report still showed weakness in several areas of the economy. The Dow Jones industrial average rose 34.03, or 0.3 percent, to 12,063.09. Gainers included Intel, DuPont, Microsoft, Boeing Merck, and Home Depot. But financial components J.P. Morgan Chase and Bank of America fell on the profit warning from Citigroup. The broader Standard & Poor's 500 index rose 5.02, or 0.4 percent, to 1,342.83. The technology-heavy Nasdaq composite index rose 32.36, or 1.3 percent, to 2,462.07. Several big technology stocks rose, including Intel, Broadcom, Microsoft, and Oracle. The New York Stock Exchange composite index fell 10.72 to 8,988.84. The American Stock Exchange composite index fell 24.10 to 2,283.23. And the Russell 2000 index rose 7.12 to 737.83.
