NEW YORK – U.S. stocks jumped Wednesday after a surge in oil prices lifted energy stocks and the government raised its estimate for economic growth, helping major indexes recover most of the ground they lost from a big sell-off early in the week.
The Dow Jones industrial average rose 90.28 points, or 0.74 percent, at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92 percent, to 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81 percent, to 2,432.23.
Exxon (XOM) and other major oil producers like Chevron Corp. (CVX) led the S&P 500 Index higher as crude oil prices ended up 2.4 percent after U.S. inventories fell more than expected in the latest week. A 2.5 percent gain in Exxon made it the No. 1 advancer in both the Dow and the S&P 500, while five of the S&P 500's 10 biggest gainers were energy stocks.
The telecom sector also performed well with shares of AT&T (T) among the biggest gainers in both the Dow and the S&P 500 after a brokerage raised its investment rating on Verizon Communications (VZ), another Dow component.
Gross domestic product grew at an annual rate of 2.2 percent in the third quarter, the U.S. government said, topping the previous official estimate and economists' forecasts.
"The word everyone is using for the economy is 'Goldilocks' and the numbers coming out are supporting this 'not too hot, not too cold' (idea) and the market likes that," said Eric Kuby, chief investment officer with North Star Investment Management Co. in Chicago.
Exxon shares shot up $1.87 to $76.03 on the New York Stock Exchange after hitting a 52-week high of $76.44. Chevron gained 1.7 percent, or $1.17, to $71.05, after reaching a 52-week high of $72.
U.S. crude oil for January delivery surged $1.47 to settle at $62.46 a barrel.
"With oil, as long as it's hovering at the $60 level, it's below the peaks and it does not seem to be a problem for consumers and users, but it does boost the oil stocks," Kuby said.
The AMEX North American Telecom Index rose 1.2 percent after A.G. Edwards raised its investment rating on Verizon Communications Inc. , sending the stock up 1.4 percent, or 49 cents, to $34.89. Verizon also ranked among the Dow's major advancers.
Shares of AT&T, the biggest U.S. phone company, rose 2.1 percent, or 68 cents, to $33.50 on the NYSE.
"There's a renewed interest in the investment community for companies that own a substantial network," said Albert Lin, an analyst at American Technology Research.
Microsoft Corp. shares rose 0.6 percent, or 18 cents, to $29.57 on the Nasdaq after its chief financial officer said he expects revenue to grow 13 percent to 15 percent this year.
The New York Times Co.'s stock climbed 7.5 percent, or $1.73, to $24.76, making it the top percentage gainer in the S&P 500, after CNBC reported that Maurice "Hank" Greenberg, the former head of insurer American International Group, is interested in launching a takeover of the newspaper company.
The report came after the New York Post said that Greenberg has been buying the company's shares.
The Federal Reserve's Beige Book, an anecdotal survey of the economy, said most areas of the United States reported moderate growth through the first weeks of November and labor markets were tight in many regions.
Trading was active on the NYSE, with about 1.61 billion shares changing hands, matching last year's daily average of 1.61 billion, while on Nasdaq, about 1.94 billion shares traded, above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of about 4 to 1 the NYSE and by about 7 to 3 on Nasdaq.