WASHINGTON - Oil prices are finally falling, stocks are rising - but so are retail prices. So how do they affect you and your wallet and where do things go from here?
A Pleasant Surprise
Investors are hoping that the big rally was only the start of a big move up in stocks.
Click play to hear Pat Robertson's analysis following CBN News Correspondent John Jessup's report.
The Dow climbed 277 points - the biggest one day jump in more than three months.
It closed with some good news on the financial front: oil prices fell for a second day. And the earnings report from Wells Fargo, America's fifth largest bank, showed a 23 percent decline for the second quarter - much better than anyone expected.
"It turned what could have been an ugly situation completely about face and actually pleasantly surprised investors," Harris Private Banks' Chief Investment Officer Jack Ablin said.
Oil fell more than $10.00 in just two days.
It closed at just below $135 Wednesday ($134.60) ,the biggest 2-day drop in 17 years and a 10 percent decline since setting a record high at $147 last week (i.e. $147.27 on July 11).
Some analysts believe the two-day tumble could mean the beginning of a correction in oil.
The sharply rising price has already led to less demand in the U.S, with some Americans altering their driving habits altogether. And some analysts wonder if demand is dropping off in other parts of the world as well.
"A very weak dollar that's supportive of the oil price, maybe some serious demand destruction that is bearish for the oil price. Those are the two factors that are pushing and pulling," said Ray Carbone, president of Paramount Options.
Airlines Feeling the Squeeze
But oil prices haven't only been hitting the pockets of drivers on the road, they've taken a toll on the airlines as well.
As Delta and American Air reported operating in the red in the second quarter of 2008, industry executives came to Capitol Hill looking for help.
"We are deeply, deeply concerned about the future of this industry, and for that matter the entire U.S. economy, given the impact that high oil prices are having on every walk of life," Air Transportation Association CEO Jim May said.
Americans have already felt the pain from rising energy and food prices. And Fed Chairman Ben Bernanke says inflation can't be allowed to take off.
"It's a top priority of the federal reserve to run a policy that's going to bring inflation to an acceptable level," Bernanke said.
Economists are predicting the Federal Reserve will try to do that by keeping interest rates right where they're at when they meet next month.