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The Honolulu Advertiser

Posted on: Wednesday, August 18, 2004

Stocks climb modestly despite spike in oil prices

By Michael J. Martinez
Associated Press

NEW YORK — Another jump in oil prices pre-empted a strong rally on Wall Street yesterday, though stocks managed to post modest gains on the strength of a consumer price report that put many investors' inflation fears to rest for the near term.

The three major indexes all finished the session higher, showing resiliency in the face of a new record high in oil futures fueled by continuing problems for Russian oil giant Yukos. A barrel of light crude was quoted at $46.75, up 70 cents, on the New York Mercantile Exchange.

Stocks managed to stay in positive territory thanks to a better-than-expected Consumer Price Index reading. The CPI registered a small drop in July, giving consumers a respite from soaring energy prices.

Housing construction also saw better-than-expected gains, with the Commerce Department reporting an 8.3 percent increase in home and apartment construction in July, more than making up for the 7.7 percent drop in June.

A number of earnings reports from retailers also gave investors a boost.

Dow component Home Depot Inc. surged $1.12 to $35.10 after the home improvement retailer reported record sales and a 19 percent increase in second-quarter profits. Home Depot beat Wall Street expectations by 7 cents per share and raised its guidance for future quarters.

Office supply chain Staples Inc. saw its profits rise 39 percent in the quarter, beating expectations by 2 cents per share. Staples, which also announced new ventures in Europe and China, gained 99 cents to $28.87.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where preliminary consolidated volume came to 1.56 billion shares, compared with 1.47 billion on Monday.