Stocks Rally as Oil Prices Skid

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Stocks ended higher Friday as oil prices plunged below $50 per barrel and a pair of economic reports eased investors’ inflation concerns.


The Dow Jones Industrial Average rose 122.14, or 1.2 percent, to finish the week at 10,192.51. The Standard & Poor’s 500 Index gained 13.63, or 1.2 percent, to 1,156.85. The Nasdaq Composite Index rose 17.47, or 0.9 percent, to 1,921.65.


A barrel of light crude settled at $49.72, down $2.05, on the New York Mercantile Exchange, its lowest level since Feb. 18. Oil prices began the week above $55 per barrel.


And the markets were bolstered by key inflation indicators that bode well for interest rates and the economy. The Commerce Department reported a 0.5 percent increase in income and a 0.6 percent hike in spending for March. The Labor Department said labor costs for businesses were falling, as Americans’ wages and job benefits rose by just 0.7 percent in the first three months of this year, following an increase of 0.8 percent in the fourth quarter of 2004.


Among local movers, shares of Worldwide Restaurant Concepts Inc. gained a whopping 27.9 percent to close at $6.29 after the Sherman Oaks-based franchiser of the Sizzler restaurants agreed to be bought by private equity firm Pacific Equity Partners for $7 a share, or about $208 million in cash. The purchase is expected to close in the third quarter.


First American Bank rose 21.5 percent to $24.30 after the Rosemead-based company signed an agreement to be bought by First Community Bancorp for $62.3 million in cash, or about $24.95 per share. Following completion of the acquisition, First American will be merged into Pacific Western National Bank, an L.A.-based subsidiary of First Community.


And Magnetek Inc. rose 4.6 percent to $3.62 after the L.A.-based maker of digital power products reported a net loss of $2.6 million (9 cents per diluted share) for the third quarter ended March 31, compared with income of $153,000 (1 cent) for the like period a year earlier. But the company said its loss from continuing operations was 7 cents a share, meeting the average estimate of analysts in a Thomson survey, even while experiencing program delays and factory moves.

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