Mon Aug 16, 2004
By Rachel Cohen

NEW YORK (Reuters) - U.S. stocks gained on Monday as oil prices dipped after reports of victory for the Venezuelan president in a referendum on his rule eased fears about the country's oil exports.

Lowe's Cos. Inc., the No. 2 home improvement retailer behind Home Depot Inc., helped push the market higher after it reported an 18 percent increase in second-quarter profit even though results trailed estimates as sales weakened in June.

With crude futures above $46 a barrel, oil is the focus for most investors but they derived some solace from news that Venezuelan President Hugo Chavez survived a recall vote, easing some fears that unrest may upset oil exports from the world's fifth-largest crude exporter.

The steady rise in oil prices has put pressure on the market in recent weeks as it pushes through new record highs.

"It's relief from Venezuela, which showed up as a little moderation in oil prices but there's still a long way to go," said Joseph Battipaglia, chief investment officer for Ryan, Beck & Co. "And the market last week put in a valiant attempt at finding a bottom, which some people are probably playing off today."

Time Warner Inc. was also higher after business weekly Barron's said the media and entertainment company still faces some formidable challenges, but a new management team led by Chief Executive Richard Parsons is laying the groundwork for a powerful revival.

The European Commission said on Monday that it had extended until Aug. 25 a deadline for its review of a planned joint venture between Time Warner and Microsoft Corp, the world's biggest software maker.

The joint venture would allow Microsoft and Time Warner, the world's largest media company, to jointly control ContentGuard Holdings, a digital rights management company.

Retailer Kmart Holding Corp. gained after it reported its third consecutive quarterly profit as cost cuts made up for slumping sales.

The Dow Jones industrial average was up 113.65 points, or 1.15 percent, at 9,938. The broader Standard & Poor's 500 Index was up 12.52 points, or 1.18 percent, at 1,077.30. The technology-laced Nasdaq Composite Index was up 24.81 points, or 1.41 percent, at 1,782.03.

Venezuelan electoral authorities said Chavez survived a referendum to recall him, winning just over 58 percent of the vote with 94 percent of the votes counted. But opposition leaders claimed the same margin of victory as Chavez, saying the results were a fraud engineered through the use of electronic voting machines. International observers have yet to give their verdict.

Light crude futures fell 43 cents to $46.15 a barrel, still not far off from record highs.
Crude oil is a vital ingredient in the production of most goods and services as well as transport. Price fluctuations ripple through the U.S. economy, hurting profits at most companies whenever the price soars.

Lowe's was up $2.85, or 6.11 percent, to $49.50 on the New York Stock Exchange.

Kmart rose $7.06, or 11 percent, to $71.99.

Time Warner gained 46 cents, or 2.9 percent, to $16.09.

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