NEW YORK – U.S. stocks advanced Thursday as rising oil prices sent shares of energy companies including Exxon Mobil Corp. (XOM) higher, offsetting disappointment over profit reports from Bear Stearns (BSC) and Goldman Sachs (GS).
Exxon shares led advances on both the Dow and the S&P 500 as U.S. crude for July delivery rose 1.4 percent to $67.19 a barrel on fresh supply concerns.
Investors also drew support from a government report that showed the core reading in the May U.S. producer price index, minus food and energy costs, came in line with expectations.
Even though the data also showed an unexpectedly strong reading in headline PPI, analysts said it served to underscore expectations of continued growth in the economy despite worries about the housing market.
"What investors are starting to incorporate is the thought that the economy might be accelerating and that the first quarter truly was the worst quarter of the year," said Paul Nolte, director of investments at Hinsdale Associates, in Hinsdale, Illinois.
"Investors are still interested in stocks and are willing to buy a dip in the market."
The Dow Jones industrial average was up 55.12 points, or 0.41 percent, at 13,537.47. The Standard & Poor's 500 Index was up 6.40 points, or 0.42 percent, at 1,522.07. The Nasdaq Composite Index was up 15.29 points, or 0.59 percent, at 2,597.60.
Exxon shares rose 1.4 percent to $84.50 on the New York Stock Exchange. Investors also snapped up shares of transportation companies and big manufacturers, among the biggest beneficiaries of a growing economy.
Diversified manufacturer General Electric Co. (GE) rose 0.5 percent to $37.84 on the NYSE. The Dow Jones transportation average was up 1.4 percent, as shares of package delivery company United Parcel Service Inc. (UPS) rose 1.5 percent to $73.19.
Telecoms company AT&T (T) was another standout gainer, jumping 1.7 percent to $40.66 after Bear Stearns raised its price target on the stock. Verizon's (VZ) price target was raised to $50 per share from $43 at HSBC, sending the stock up 0.5 percent to $43.13.
On the Nasdaq, Apple Inc. (AAPL) led advances with a 0.8 percent gain to $118.48 on optimism about the company's upcoming iPhone, which will be sold by AT&T.
On the downside, Goldman Sachs tracked rival Bear Stearns lower. Goldman shares dropped 2.8 percent to $227.15 as the margin of the company's quarterly earnings outperformance disappointed investors.
Bear Stearns, one of the largest U.S. mortgage bond underwriters, said quarterly profit fell by a third, sending its stock down 1.3 percent to $147.51.