Stocks rise sharply as oil plummets

NEW YORK -- Wall Street roared back Tuesday, propelling the Dow Jones industrials up 114 points as crude oil prices plunged more than $2 and consumer confidence surged to a three-year high.

Investors bought up stocks as crude oil, which had closed above $60 per barrel Monday for the first time, fell to $58 amid profit-taking following the recent runup in prices. Light crude settled at $58.20, down $2.34, on the New York Mercantile Exchange.

In addition, the Conference Board's consumer confidence index rose to its highest level since 2002, and consumers' optimism about the future also rose. "The selloff last week was a little much based on the underlying economic fundamentals," said Scott Wren, equity strategist for A.G. Edwards & Sons. "Companies were able to make plenty of money over the last two quarters when oil was in the mid-$50s, and consumers will continue to spend money at these levels. It was just over done, and we're getting some of it back now."

"It's good to see the dollar rise. It's good to see oil come down. And it's good to see consumer confidence numbers like this," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "But we still have problems out there that need to be addressed, starting with the Fed. So while we have a nice move higher, it likely won't last that long."