Stocks End Higher After Another Wild Session

Stocks closed higher after another volatile session, helped by a rally among energy shares as oil soared to a record high close of $98 a barrel.

Stocks swung wildly throughout the day, first opening higher and then turning lower as housing and credit concerns weighed on the financial sector.

The Fed's release of its October minutes at 2 pm sent stocks even lower. The central bank forecast a slowdown in the economy next year but expressed reluctance to cut interest rates further.

"The bond market's kind of sitting on the Fed’s chest as the playground bully saying, 'you're going to have to cut interest rates from here, whether it's in December or early next year," said Thomas Higgins, chief economist at Payden & Rygel. "I think the Fed’s next move is still going to be to lower interest rates."

The market then rebounded in the final hour as higher oil prices boost energy shares like Exxon Mobil.

Freddie Mac , the second-largest U.S. mortgage finance company, announced a wider third-quarter loss than anticipated, sending shares plunging. Fellow government-backed subprime lender Fannie Mae also posted steep losses a day after analysts downgraded the lender.

Financial stocks also retreated on a Wall Street Journal report that a $4 billion sale of loans being raised by automaker Chrysler following its takeover by buyout firm Cerberus has been indefinitely postponed.

Release of the Fed news triggered oil to climb past $98 and head for record territory. Earlier talk of a rate cut pushed the dollar to yet more record lows against both the euro and Swiss franc. Treasury prices were mostly higher after stocks fell.

Moving the Market

The housing market received a pleasant surprise from D.R. Horton , the largest US home builder, which reported a quarterly loss after taking charges for the lower value of land and other housing-related inventory. But the loss of 16 cents a share was much smaller than analyst forecasts of 57 cents, sending shares up more than 4 percent.

Financials continued to take a beating, with Countrywide Financial again testing new lows as investors remained pessimistic about the largest subprime lender's ability to recover from the troubles that have hit that portion of its business. Company officials late in the trading day called rumors of a possible bankruptcy filing "absolutely false."

Elsewhere, high-end retailer

Nordstrom's

posted gains of more than 10 percent after reporting strong after-the-bell earnings Monday, while

Saks

shares fell, as an analyst predicted lower gross margins ahead even though the company said profit more than tripled in the third quarter.

Dick's Sporting Goods also saw its shares gain on solid earnings.

Medtronic jumped 8 percent, a day after the medical device maker posted quarterly results that suggested a fleeting impact from the discontinued sales of a heart device component. And telecomm firm Ericsson saw shares tumble after it lowered its fourth-quarter guidance.

-- Reuters contributed to this report.

© 2008 CNBC.com