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The Honolulu Advertiser

Posted on: Friday, June 17, 2005

Stocks inch higher amid economic uncertainty

By Ellen Simon
Associated Press

NEW YORK — Stocks eked out a gain for the fourth straight day yesterday after tepid housing start and jobless claims reports gave investors few clues about the direction of the economy and interest rates.

Investors were hoping for a hint of how the Federal Reserve, which meets later this month, will formulate its monetary policy for the coming months.

"Investors are parsing every bit of economic data for an indication that the Fed is willing to step aside" and end its year-long streak of rate hikes, said Joseph Keating, chief investment officer at AmSouth Asset Management.

The Dow Jones industrial average rose 12.28, or 0.12 percent, to 10,578.65 after moving in and out of positive territory for much of the session. The Dow also inched higher the first three days of the week — an indication that investors, while uninspired by the economic data, are finding few reasons for a big selloff.

Broader stock indicators also closed narrowly higher. The Standard & Poor's 500 index rose 4.38.

The Commerce Department reported that housing starts edged up 0.2 percent in May, slightly less than expected, but the level of new construction permits remained strong.

Economically sensitive stocks, including raw materials producers, were among the market's best performers yesterday.

"Commodity stocks, which were left for dead two weeks ago, have turned the corner, which indicates that the economy isn't going in the Dumpster like a lot of people think," said Gary Kaltbaum, an independent money manager in Orlando, Fla.

Advancing issues led decliners 2 to 1 on the New York Stock Exchange, where volume was 1.83 billion shares, down from 1.89 billion Wednesday.