Stocks rally as oil slumps
Wall Street gains as investors welcome an improved first-quarter GDP reading, a stronger dollar and weaker crude prices. After the close, Dell jumps.
NEW YORK (CNNMoney.com) -- Stocks gained Thursday as investors cheered sliding oil prices, a rallying dollar and a report that showed first-quarter GDP growth was better than initially reported.
After the close, Dell (DELL, Fortune 500) reported quarterly sales and earnings that topped estimates, sending shares almost 10% higher in after-hours trading.
The Dow Jones industrial average (INDU) added about 0.4%. The broader Standard & Poor's 500 (SPX) index gained 0.5% and the Nasdaq composite (COMP) added 0.9%.
Wall Street seesawed throughout the morning in tune with the tumultuous oil market, with stocks finally moving higher around midday as crude prices again slumped.
Stocks are seeing "a little bit of a relief rally" as oil prices continue to back off the high above $135 a barrel hit last week, said Thomas Nyheim, portfolio manager at Christiana Bank & Trust Company.
In general, investors are also breathing a sigh of relief that the mostly completed first-quarter earnings reporting period wasn't too terrible, outside the financial sector, Nyheim said.
Yet, the outlook for stocks remains muddled over the next few months, he said, with the market likely to see slow growth amid a struggling economy and ongoing problems in the financial sector.
Friday brings economic reports on personal income and spending and the report's inflation component before the start of trade. After trading begins, reports are due on manufacturing in the Midwest and consumer sentiment.
Oil prices slide: U.S. light crude oil for July delivery fell $4.41 to settle at $126.62 a barrel on the New York Mercantile Exchange.
Prices seesawed after the government reported a surprise drop in weekly crude oil and gas supplies last week, but that the decline was due to short-term delays in unloading Gulf Coast tankers.
Oil was also declining in response to a stronger dollar, which makes dollar-traded commodities pricier for international investors to buy.
Gold also slumped on the dollar's rise. COMEX gold for August delivery fell $23.30 to settle at $881.70 an ounce.
Gas hits 22nd record high: The national average price for a gallon of regular unleaded gas rose to a record $3.952 from the previous day's record of $3.944, AAA reported.
GDP revised higher: Economic growth in the first quarter grew at a faster paced than initially thought, the government reported. U.S. gross domestic product rose at an annual rate of 0.9%, as expected, versus the initial reading of 0.6%. The Core PCE deflator, the report's closely-watched inflation component, was 2.2%. (Full story).
Retail earnings: Sears Holdings (SHLD, Fortune 500) reported a quarterly loss versus a profit a year earlier on weaker revenue, missing analysts' estimates. Shares fell 3.6%.
Costco (COST, Fortune 500) reported higher earnings that topped analysts' estimates on higher revenue that missed expectations. Shares were barely changed.
Like Costco, Big Lots (BIG, Fortune 500) benefited from struggling consumers seeking bargains, posting higher quarterly sales and earnings that topped expectations. Shares gained 7.5%. (Full story)
JPMorgan-Bear Stearns deal closes: As expected, the majority of Bear Stearns (BSC, Fortune 500) shareholders endorsed JPMorgan Chase (JPM, Fortune 500)'s proposed takeover of the brokerage, which nearly collapsed amid the subprime mortgage market meltdown. Both stocks gained. (Full story).
A number of financial stocks gained, including Dow components American Express (AXP, Fortune 500), Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500).
Market breadth was positive. On the New York Stock Exchange, winners beat losers 3 to 2 on volume of 1.23 billion shares. On the Nasdaq, advancers topped decliners by a similar margin on volume of 1.93 billion shares.
Jobless claims rise: The number of Americans filing new claims for unemployment rose 4,000 to 372,000 last week, topping expectations. (Full story).
Other markets: The dollar gained versus the euro and yen.
Treasury prices tumbled, raising the yield on the 10-year note to 4.08% from 4% late Monday. Bond prices and yields move in opposite directions. 
