US stocks jump as oil falls

US stocks did well yesterday despite disappointing pending home sales data for May. From Bloomberg:

U.S. stocks rallied the most in a month, led by banks and transportation companies, after JPMorgan Chase & Co.'s chief executive officer said losses in credit markets will ease and oil posted its biggest drop since March...

The Standard & Poor's 500 Index jumped 21.39 points, or 1.7 percent, to 1,273.7. The Dow Jones Industrial Average climbed 152.25, or 1.4 percent, to 11,384.21. The Nasdaq Composite Index added 51.12, or 2.3 percent, to 2,294.44. Almost four stocks gained for each that fell on the New York Stock Exchange...

Crude oil for August delivery fell 3.8 percent to $136.04 a barrel in New York on concern that the global economy may slow further. Oil dropped almost $10 since reaching a record $145.85 a barrel on July 3.

Upside for stocks still looks somewhat limited to me, though. Essentially, the US stock market has merely given up most its gains since the Fed ended its rate-hiking cycle in mid-2006. That Fed pause had been an important trigger for markets to resume their bull runs and ultimately over-extend themselves.

But with most of those pause-induced gains having been given up, and the Fed on yet another pause but on the easing side, it's going to be interesting to see which way the market now turns.