Oil Helps Dow to New High

If you want higher equity prices, there's one sure way to get there: Cut the price of oil. While you're at it, take a bite out of the precious metals as well.

That's what happened today as the Dow popped another 19.07, setting another record close at 12,786.64. The price of crude had much to do with the Dow's rise, as news from the corporate landscape was none too cheery. Besides the proposed merger of the two paid satellite radio providers - Sirius and XM (both going broke) - Home Depot had a rough quarter and Wal-Mart missed sales numbers for the 4th quarter of 2006.

That's Ugly, with a capital UGH.

Leave it to the oil barons to come to the rescue of the pinstripers on Wall Street by dropping the price of a barrel of crude as low as 57.35 during the day, before closing at 58.07. That little dip was enough good news to set off a little buying of overinflated stocks. At the same time, gold and silver took broadsides and remain rangebound.

While the Dow managed only a .15% gain, the other indices did better. the Nasdaq added 16.73 and finally closed above 2,500, finishing at 2,513.04, while the S&P 500 gained 4.14 to 1459.68.

Nasdaq's feat was far more impressive than that of the Dow's, breaking through a number that hasn't been seen around these parts in 6 years. It's a very positive sign for techs and the economy as a whole, plus, the emotional value is not to be understated. While the bull market rages into uncharted territory, the markets are signaling an even bigger burst higher is ahead.

As for the market "cheering" the proposed Sirius and XM merger as the Wall Street Journal is reporting on their radio broadcasts, both services have hit the wall and are soon to be hemorrhaging money, so the merger is a way out. The regulatory hurdles are high for this one, however, as merging the only two national satellite radio broadcasters would be the definition of a monopoly. It shouldn't happen and probably won't unless antitrust rules are no longer valid.