U.S. Stocks Rise, Led by Energy Shares; Dow Chemical Advances

By Elizabeth Stanton

Oct. 23 (Bloomberg) -- U.S. stocks rose and the Standard & Poor's 500 Index rebounded from a five-year low as higher oil prices boosted energy shares, overshadowing a report showing that foreclosures jumped to a record.

National Oilwell Varco Inc. climbed 5.4 percent and led energy shares in the S&P 500 to a 3.2 percent advance after profit topped analysts' estimates and crude rebounded from a 16- month low. Dow Chemical Co., the largest U.S. chemical company, added 9.1 percent after third-quarter profit beat projections on higher prices for latex and plastics used in packaging.

The S&P 500 gained 6.57, or 0.7 percent, to 903.35 at 10:07 a.m. in New York. The Dow Jones Industrial Average rose 76.62, or 0.9 percent, to 8,595.83. The Nasdaq Composite Index added 0.38, or less than 0.1 percent, to 1,616.13.

The S&P 500 closed at the lowest level since April 2003 yesterday on concern a deepening global economic slump will damp profits. The benchmark index for U.S. equities extended its 2008 decline to 39 percent yesterday, poised for its worst annual performance since 1931.

A total of 765,558 U.S. properties got a default notice, were warned of a pending auction or were foreclosed on in the quarter, RealtyTrac, an Irvine, California-based seller of default data said today. Rick Sharga, executive vice president of marketing for RealtyTrac, said he wouldn't be surprised if foreclosures continue to increase.

Losses stemming from the collapse of the U.S. subprime mortgage market have surpassed $650 billion globally, prompting the U.S. and at least 10 European countries to inject capital into their banking systems to resuscitate lending.

Libor Watch

A key gauge of banks' willingness to lend, the London interbank offered rate for dollars, has declined over the past two weeks, indicating the measures are working to some degree. Three-month Libor held at 3.54 percent today, down from 4.82 percent on Oct. 10. During the six months through Sept. 15, the rate ranged from 2.54 percent to 2.92 percent.

The S&P 500 has moved more than 1 percent on 13 of the 16 days this month, making it the most volatile by that measure since September 1932, according to S&P analyst Howard Silverblatt. Stock prices are gyrating as investors weigh government efforts to unlock credit markets with growing concern that the global economy is headed for a recession.

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net