U.S. Stocks Soar as Oil Prices Sink Lower

Updated from 8:04 a.m. EDT

Stocks in New York leapt out of the gate Tuesday, after a weaker-than-feared Hurricane Gustav failed to cause major oil-supply disruptions over the holiday weerkend, sending the price of crude substantially lower.

The Dow Jones Industrial Average soared 231 points to 11,774, and the S&P 500 jumped 17 points to 1300. The Nasdaq added 40 points to 2408.

As trading got underway for the Labor Day-shortened week, the price of crude oil was plummeting $8.29 to $107.17, after Gustav hit the Louisiana coast but largely spared New Orleans and energy-production facilities in the area. Gold was down $36.50 to $798.70.

As for corporate news, Internet company Google (GOOG Quote) said it will develop its own Web browser in an effort to compete with Microsoft (MSFT Quote).

Elsewhere in technology, Alcatel-Lucent (ALU Quote) appointed Ben Verwayyan, former head of BT Group, as its new CEO. Alcatel-Lucent also selected Philippe Camus to be its nonexecutive chairman.

Meanwhile, Bloomberg reported that Korea Development Bank is holding discussions to buy a stake in struggling brokerage Lehman Brothers (LEH Quote), continuing a rumor that has been around for the past couple of weeks but has yet to be confirmed.

Away from stocks, longer-dated U.S. Treasury securities were trading lower. The 10-year note was down 13/32 to yield 3.86%, and the 30-year was losing 20/32, yielding 4.46%. The dollar was rising sharply against the euro, yen and pound.

Turning to the day's economic data, traders will receive the U.S. Census Bureau's look at July construction spending, as well as the Institute for Supply Management's manufacturing index.