Stocks leap; Dow up 213

NEW YORK - Stocks surged yesterday as investors looked past a sharp rebound in oil prices and focused on better-than-expected retail sales and a drop in the number of laid-off workers seeking unemployment benefits.

The Dow Jones industrials rose almost 214 points.

The market got an additional boost from word that Verizon Wireless would acquire Alltel Corp. for $5.9 billion in cash and the assumption of $22.2 billion in debt.

Not all of yesterday's news, however, was positive. Even though the Labor Department said applications for unemployment benefits declined last week by 18,000, to 357,000, the four-week average rose to a four-month high.

Other worrisome developments included a more than $5 spike in crude oil to almost $128 a barrel, a steep tumble by the dollar against the euro, rising bond yields, a record high in corn prices, and a Mortgage Bankers Association report showing that nearly 1 percent of mortgages fell into foreclosure between January and March.

Stock investors appeared to be ignoring yesterday's negative signals. Instead, they were betting on an economic recovery later in the year.

The Dow rose 213.97, or 1.73 percent, to 12,604.45. The Standard & Poor's 500 index rose 26.85, or 1.95 percent, to 1,404.05, and the Nasdaq composite index rose 46.80, or 1.87 percent, to 2,549.94.

The Russell 2000 index of smaller companies rose 19.56, or 2.63 percent, to 763.27.

The stock market appeared to be shrugging off a sharp rebound in oil prices. Light, sweet crude oil rose $5.49 to settle at $127.79 a barrel on the New York Mercantile Exchange.

In corporate news, Verizon Communications Inc. rose $1.98, or 5.35 percent, to $38.96 after the announcement of Verizon Wireless' deal. Verizon Wireless is a joint venture between Verizon Communications and Vodafone Group P.L.C. Alltel was sold to TPG Capital and a unit of the Goldman Sachs Group Inc. in a $27.5 billion leveraged buyout about seven months ago.

Continental Airlines Inc. rose 70 cents, or 4.83 percent, to $15.20 after announcing plans to cut 3,000 jobs and reduce its capacity in the fourth quarter 11 percent as it grapples with surging prices for jet fuel prices.

Among retailers reporting solid May results, Wal-Mart Stores Inc. said sales at stores open at least a year rose as consumers sought bargains. Wal-Mart shares rose $2.12, or 3.68 percent, to $59.80.

The stock market initially pulled back a bit after the ratings agency Standard & Poor's downgraded bond insurers Ambac Assurance Corp. and MBIA Insurance Corp. But the move did not come as a shock to most investors. Ambac rose 13 cents, or 5.22 percent, to $2.62, and MBIA rose 41 cents, or 7.28 percent, to $6.04.