Posted on: Thursday, May 26, 2005
Investors take profits as oil prices rise again
By Michael J. Martinez
Associated Press
NEW YORK — Surging oil prices prompted new worries about the economy and sent stocks lower yesterday as investors locked in profits from the market's recent rally. The concerns over oil overshadowed a strong report on manufacturing orders.
The concerns over oil eclipsed a report from the Commerce Department that said orders for durable goods — big-ticket items designed to last at least three years — rose 1.9 percent in April, far more than the 1.5 percent analysts had expected. The report cheered investors worried about a slowdown in consumer demand.
"Oil is a concern, but the economy still appears to be in very good shape," said Brian Belski, market strategist at Piper Jaffray. "In stocks, what we're seeing is a fairly normal respite after last week's rally. I still think we're ready for a surprising summer rally ahead."
New home sales hit an all-time high in April, but were less than Wall Street had expected.
Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where consolidated volume came to 1.82 billion shares, compared with 1.69 billion traded on Tuesday.
Crude futures rose sharply after the government reported a 1.6 million-barrel drop in its oil inventories. The news created concerns about supply as the summer driving season begins. After rising as high as $51.60 a barrel during the session, crude futures settled at $50.98 a barrel, up $1.31, on the New York Mercantile Exchange.
