Stocks Rally On Tuesday As Oil Moves Lower

New York, NY (AHN) - All three major indices finished higher by more than 1 percent as the price of crude oil fell more than 2 percent on Tuesday.

The markets opened the session lower after disappointing earnings from American Express and a softer than expected forecast from Apple Inc. sparked pre-market selling. However, a rally in the financial sector and the sliding price of oil provided a catalyst for a broad market rally.

Crude oil dropped for the fourth time in five sessions as the commodity shed $3.09 a barrel, settling at $127.95 on the New York Mercantile Exchange.

The Dow Jones Industrial average added 135 points or 1.18 percent with Bank of America providing the most strength, up 13.2 percent to $32.35.

The S&P 500 managed to add 17 points or 1.35 percent even with the energy sector providing a drag, down 2.2 percent on the session.

Tech rallied on Tuesday as the Nasdaq Composite gained 24.4 points or 1.07 percent. Strength came from smaller cap names as the large-cap Nasdaq 100 only rose 0.1 percent.

Six of the 10 major economic sectors rose on Tuesday. Airline stocks were the biggest percentage gainers, up 22 percent.

The financial sector traded down as much as 3.8 percent after Wachovia reported an $8.9 billion quarterly loss, larger than what the street was expecting. However, Wachovia shares rebounded; sparking a rally in financials after the company said it plans to raise capital internally and received positive comments from a Deutsche Bank analyst. The sector finished 6.6 percent higher Tuesday.

The slew of quarterly earnings reports continues as Washington Mutual, Yahoo and E-trade are some of the big names due to post results after the close Tuesday.