New York - Oil futures dropped 4 per cent Friday in New York to book a weekly decline for the fourth time in five weeks, sparking a rally in US stocks and a surge in the US dollar.

Crude oil closed at 115.20 dollars per barrel on Friday, just as average US retail petrol prices dropped to a 10-week low.

Declining prices for fuel and other commodities were "very favorable" for the stock market, Cabot Money Management President Robert Lutts told the Bloomberg financial news agency. "It's taking off a huge tax that was put on companies, the stock market, and people in general."

The blue-chip Dow Jones Industrial Average soared 302.89 points, or 2.65 per cent, to 11,734.32. The broader Standard & Poor's 500 Index leapt 30.25 points, or 2.39 per cent, to 1,296.32. The technology-heavy Nasdaq Composite Index rallied
58.37 points, or 2.48 per cent, to 2,414.1.

The US currency rose to 66.644 euro cents from 65.24 euro cents on Thursday. The dollar gained against the Japanese currency to 110.18 yen from 109.35 yen.

Gold futures fell 13.10 dollars to 864.80 dollars per fine ounce. (dpa)