Posted on: Wednesday, August 25, 2004
Retreat in oil prices has little effect on market
By Michael J. Martinez
Associated Press
NEW YORK — Investors all but ignored another substantial retreat in oil prices yesterday, leaving stocks mixed in a listless and lightly traded session. Tech stocks fell in response to a brokerage downgrade of Cisco Systems Inc., while blue chips got a boost from an upgrade of Caterpillar Inc.
Investors were concerned that oil prices, which topped $49 per barrel late last week but closed down 84 cents at $45.21 on the New York Mercantile Exchange, could advance again. Another sharp rise could raise corporate costs and reduce consumer spending, thus harming third- and fourth-quarter earnings.
"Without any real big economic or geopolitical news here, the market's keying off of oil," said Jay Suskind, head trader at Ryan Beck & Co. "But we're in the dog days of August here, so there's just not going to be a lot of volume or conviction here."
An increase in stock options granted by Cisco Systems Inc. caused UBS to lower its price target for the network equipment maker by $1 per share. Cisco slid 21 cents to $18.97.
The market had little reaction to the National Association of Realtors' existing home sales report, which showed that 6.72 million units changed hands in July, down 2.9 percent from June and less than had been expected. Rising consumer prices and a drop in consumer confidence were blamed for the decline.
Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where preliminary consolidated volume came to 1.37 billion shares, compared to 1.29 billion on Monday.
Although oil dipped briefly below $45 per barrel during the session, two days of falling prices weren't enough for cautious investors to get back into the market, despite very attractive prices.
