Stocks Rally as Oil Eases

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Stocks chalked up their biggest one-day gains in nearly four months on Wednesday as modest growth in the gross domestic product and a drop in crude oil prices temporarily set aside inflation fears.


The Dow Jones Industrial Average rose 135.23, or 1.3 percent, to close at 10,540.93. The Standard & Poor’s 500 Index was up 16.05, or 1.4 percent, at 1,181.41. The Nasdaq Composite Index gained 31.79, or 1.6 percent, to 2,005.67, after falling to a five-month low on Tuesday.


The U.S. economy ended 2004 with brisk momentum on the strongest surge of corporate profits in three years, growing at an annual rate of 3.8 percent, the government reported. The fourth-quarter gross domestic product figure, released by the U.S. Commerce Department, matched an estimate made a month ago.


And oil prices dropped after the Energy Department reported a 5.4 billion barrel increase in the nation’s crude oil reserves. Light, sweet crude futures were down 24 cents to $53.99 per barrel on the New York Mercantile Exchange.


Among local companies, shares of Amgen Inc. rose 1.3 percent to $58.99, shrugging off news that Barr Laboratories had teamed with Pliva D.D. to develop and sell a generic version of Thousand Oaks-based Amgen’s Neupogen drug.


And Grill Concepts Inc. gained 3.6 percent to close at $2.59 despite an announcement after market close on Tuesday that the L.A.-based casual dining restaurant operator would delay the filing of its 2004 annual report to review its lease accounting issues. The company is one of many restaurant operators to announce such revisions in the past several weeks. Grill Concepts also will restate its financial statements for 2002 and 2003 with the revised figures.

On the down side, shares of Tetra Tech Inc. plunged 16.9 percent to $12.46 as the Pasadena-based environmental engineering firm said it would exit the wireless market after trying for several quarters to boost the underperforming division. Its shares had swooned in after-hours trading, opening more than $3 lower than Tuesday’s closing price of $14.99. The company said it would take a $50 million write-off on the value of its wireless business and said it would be dropping its “major wireless customer” in California, widely believed to be Nextel Communications Inc.


And Mossimo Inc. dropped 13.9 percent to $3.29 after the Santa Monica-based apparel maker reported disappointing fourth-quarter net income of $629,000 (4 cents per diluted share), compared with $693,000 (4 cents) for the like period a year earlier. Revenue for the quarter ended Dec. 31 rose to $3.2 million from $3 million in the comparable period of the prior year.

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