Stock Prices Rally as Seesaw Trend Persists

Stocks rallied Friday in active trading, sending the Dow index up 122 points, as oil closed below $50 a barrel for the first time in more than two months and Microsoft said next year’s sales might be better than expected.

The market’s seesaw trading pattern -- up one day, down the next -- continued for a ninth straight session. The Dow had lost 128 points Thursday on fresh worries about the economy.

On Friday, oil’s slide clearly brought relief to investors.

“It’s well recognized that oil is one of the risk factors in the economic picture,” said Richard Rippe, economist at Prudential Equity Group in New York.

Near-term crude futures in New York fell $2.05 to $49.72 a barrel, which traders said reflected rising U.S. supplies in recent weeks.

On Wall Street, the buying was further buoyed by government data that showed personal income and spending rising in March and labor costs held in check in the first quarter.

The Dow Jones industrial average climbed 122.14 points, or 1.2%, to 10,192.51. The broader Standard & Poor’s 500 index added 13.63 points, or 1.2%, to 1,156.85, as all 10 of its main industry groups gained.

The technology-heavy Nasdaq composite index rose 17.47 points, or 0.9%, to 1,921.65.

Advancing stocks outnumbered decliners by more than 2 to 1 on the New York Stock Exchange and by 3 to 2 on Nasdaq.

A late surge in trading volume was attributed in part to large investors executing end-of-the-month trading strategies.

For the week, key indexes were mixed: The Dow added 0.3% and the S&P; 500 gained 0.4%, but Nasdaq shed 0.6%.

For the month, the Dow lost 3%, the S&P; 500 fell 2% and Nasdaq slumped 3.9%, amid concerns that the economy was weakening. On Thursday the government said gross domestic product rose at a 3.1% real annualized rate in the first quarter, down from 3.8% in the fourth quarter.

Market bulls say that, although growth has slowed, the economy still is strong enough to keep corporate profits rising. For the first quarter, operating earnings of the S&P; 500 firms are estimated to have increased 13.6% from a year earlier, according to data tracker Thomson First Call.

Investors’ doubts about stocks made for a volatile last four weeks: During April, the Dow swung 100 points or more in either direction seven times, displaying volatility not seen since March 2004. The Dow’s 3% loss for the month was its worst performance since January 2003.

With earnings season winding down, the market’s next big hurdle may be the Federal Reserve meeting Tuesday. Central bank policymakers are widely expected to raise their benchmark short-term interest rate by a quarter percentage point, to 3%, in what would be the eighth such increase since June.

More important will be any hint the Fed gives about the future pace of rate increases.

Treasury bond yields, which fell to two-month lows this week amid doubts about the economy, inched up Friday as some investors shifted out of bonds and into stocks. The yield on the benchmark 10-year T-note rose to 4.20% from 4.15% on Thursday.

Among the day’s highlights:

* Microsoft rallied 85 cents to $25.30 after saying late Thursday that sales in fiscal 2006 could be as high as $44.1 billion, versus earlier estimates of $43.4 billion. Among other tech issues, Intel rose 33 cents to $23.52 and IBM added 47 cents to $76.38.

* Hartford Financial Services Group zoomed $5.35 to $72.37 after beating first-quarter profit expectations. Other insurance issues also were strong.

* Archer Daniels Midland fell $3.64 to $17.99 after the grain processor issued disappointing earnings results.

Earnings shortfalls also clipped Columbia Sportswear, which lost $7.96 to $43; software maker MicroStrategy, which plunged $13.52 to $43.48; and online flower merchant Provide Commerce, which wilted $8.03 to $17.65.

* Morgan Stanley rallied late in the day, gaining $2.18 to $52.62, after CNBC reported that the brokerage’s board had called an emergency meeting for Saturday to discuss the status of beleaguered Chief Executive Philip Purcell.

* Calpine rose 34 cents to $1.79 after the power plant owner -- seeking to allay concerns that it might be pushed into bankruptcy -- said it had $800 million in cash at the end of March.