Posted on: Friday, October 29, 2004
Downtrend in oil prices helps lift stocks again
By Michael J. Martinez
Associated Press
NEW YORK — Another sharp drop in oil prices helped Wall Street overcome profit-taking and extend its rally to a third straight session yesterday. The major indexes posted modest gains in a heavily traded session.
Oil prices dropped past $51 per barrel, continuing Wednesday's sharp retreat and coaxing stock buyers back into the market in afternoon trading. A barrel of light crude oil closed at $50.92, down $1.54, on the New York Mercantile Exchange, the lowest close for oil futures since Oct. 4's price of $49.91 a barrel.
"Certainly, there's still a good amount of risk appetite in the market," said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. "You're seeing people come back in despite the pressures, and as far as earnings go, so far so good."
Unemployment questions weighed on some investors, as the Labor Department reported a sharp uptick in first-time jobless claims. The number of Americans filing for unemployment for the first time rose to 350,000, up 20,000 from last week — the largest jump in a month.
In one of the more notable initial public offerings of the year, DreamWorks Animation SKG Inc. — the studio responsible for the "Shrek" franchise — jumped $10.75 from its $28 offering price to close at $38.75 per share.
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where preliminary consolidated volume came to 2.09 billion shares, compared to 2.18 billion Wednesday.
Concern over China's decision to raise its benchmark interest rate for the first time in nine years pressured materials and energy stocks as investors worried about slower demand from the world's fastest-growing economy. The move also encouraged selling in oil.
