Posted on: Thursday, May 19, 2005
Stocks gain again as oil, inflation concerns ease
By Seth Sutel
Associated Press
NEW YORK — Wall Street posted big gains for the third straight day yesterday as a benign reading of consumer inflation relieved investors. The Dow Jones industrial average jumped more than 130 points, giving the indicator a gain of more than 300 points so far this week.
Despite the pronounced upturn, however, it was not clear that the market has completely shaken off the lingering worries about inflation and rising interest rates that have dogged it over the past several weeks.
"It's been a very tough market," said Todd Leone, head of listed trading at SG Cowen & Co. "It seems like we've done this before — it's rallied and then sold off again. I'd like to see a sustained rally before we get too excited, say getting to 11,000. And I don't see that happening until the Fed stops raising rates."
"The market was oversold a couple weeks ago, and now we're seeing relief on the two things keeping the market down: rates and oil," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco.
"The nice thing about the inflation data is that it shows that higher prices aren't getting passed on to the consumer," Koesterich said.
Advancing issues outnumbered declining ones by 3 to 1 on the New York Stock Exchange, on consolidated volume of 2.33 billion shares, compared to 1.94 billion traded on Tuesday.
Investors were also encouraged by a decline of nearly $2 a barrel in oil prices, and Dow component Hewlett-Packard Co. turned in a solid earnings report.
