Posted at 11:47 a.m., Friday, September 30, 2005
Stocks end higher despite weak consumer data
Associated Press
NEW YORK Wall Street ended an erratic quarter with a modest advance today as falling oil prices helped ease concerns about a weakening consumer environment in the wake of hurricanes Katrina and Rita. The major indexes finished both the week and the quarter with sturdy gains.Stocks fluctuated throughout today's session following news that personal income and spending declined last month, and that consumer confidence plunged from August. The numbers mostly reflecting the month before the storms ravaged the Gulf Coast largely missed expectations and raised fears about further decreases this winter amid record energy prices.
The market was helped by the fact that crude oil eased as traders took profits following this week's runup, but worries persisted about supply shortages this winter in the aftermath of the hurricanes. A barrel of light crude dropped 55 cents to $66.24 on the New York Mercantile Exchange.
At the close of trading, the Dow Jones industrial average gained 15.92, or 0.15 percent, to 10,568.70, after spending most of the session in negative territory.
The broader stock indicators also moved higher. The Standard & Poor's 500 index was up 1.13, or 0.09 percent, at 1,228.81, and the Nasdaq composite index rose 10.47, or 0.49 percent, to 2,151.49.
Bonds continued their slide, with the yield on the 10-year Treasury note climbing to 4.33 percent from 4.29 percent yesterday. The U.S. dollar was mixed against other major currencies in European trading, while gold prices edged lower.
With the third quarter drawing to a close yesterday, investors acted tentatively as they prepared for the upcoming earnings season, which could indicate where the economy is headed as confidence weakens from rising gas prices and interest rates. Nonetheless, Ed Keon, chief investment strategist at Prudential Equity Group, said he remains optimistic despite a spate of profit warnings over the past month.
"The earnings pattern for the rest of this year and next year has actually strengthened a bit, as energy has gone up," Keon said. "Earnings are going to be a nice support for the market over the next few weeks."
Wall Street began the quarter optimistic that the nation could weather higher energy prices, and the S&P 500 and the Nasdaq rallied to four-year highs in early August. But the mood soured this month as back-to-back hurricanes tormented key Gulf Coast petroleum refineries, sending oil above $70 a barrel and retail gas well past $3 a gallon. Traders grew fearful of a slowdown in consumer spending, particularly ahead of the critical holiday shopping season.
The University of Michigan's consumer sentiment index echoed those concerns, with the September reading sliding to 76.9 from 89.1 in August. That also confirmed a drop in confidence reported earlier this week by the Conference Board.
Still, a resilient market managed to push the major indexes higher. For the week, the Dow rose 1.43 percent, the S&P 500 climbed 1.11 percent and the Nasdaq gained 1.65 percent.
The indexes' September performance reflected the market's anxiety about the hurricanes' impact, with the Dow gaining just 0.83 percent and the S&P 500 0.69 percent, while the Nasdaq fell 0.02 percent.
And for the third quarter, the Dow gained 2.86 percent, the S&P climbed 3.15 percent and the Nasdaq surged 4.61 percent.
Today, the Department of Commerce said August spending dropped 0.5 percent in August, compared with a 1.2 percent gain the month before, while income slipped 0.1 percent after growing 0.3 percent in July. Economists were expecting spending to decline 0.2 percent and income to grow by 0.3 percent.
In corporate news, Wal-Mart Stores Inc. paid $600 million to boost its stake in Japanese retailer Seiyu to more than 50 percent, making the company a Wal-Mart subsidiary. Wal-Mart, which previously owned 42 percent of Seiyu, has been working with Seiyu on installing computerized systems, cost cutting and supply-chain management. Wal-Mart rose 28 cents to $43.82.
Boeing Co. gained after its machinists approved a new labor contract and ended a strike that shut down its commercial plane assembly plants for almost a month. Boeing's 18,400 machinists walked off the job on Sept. 2 after rejecting a proposed contract in which they said the company ignored several demands. Boeing added 67 cents to $67.95.
Consumer products maker Procter & Gamble Co. said the Federal Trade Commission has cleared its proposed $57 billion acquisition of rival Gillette Co. provided it sells off several brands. P&G plans to sell Gillette's Rembrandt toothpaste and Right Guard, Soft & Dri and Dry Idea deodorant brands next quarter. P&G rose $1.32 to $59.46.
Advancing issues outpaced decliners by about 19 to 13 on the New York Stock Exchange, where preliminary consolidated volume of 2.09 billion shares fell behind the 2.21 billion shares traded yesterday.
The Russell 2000 index of smaller companies rose 2.77, or 0.42 percent, to 667.80.
Overseas, Japan's Nikkei stock average fell 0.32 percent. Britain's FTSE 100 slipped 0.01 percent, Germany's DAX index gained 0.46 percent, and France's CAC-40 was higher by 0.46 percent.
The Dow Jones industrials ended the week up 149.11, or 1.43 percent, finishing at 10,568.70. The S&P 500 index was up 13.52, or 1.11 percent, to close at 1,228.81.
The Nasdaq rose 34.85, or 1.65 percent, during the week, closing Friday at 2,151.69.
The Russell 2000 index closed the week up 7.60, or 1.15 percent, at 667.80.
The Dow Jones Wilshire 5000 Composite Index a free-float weighted index that measures 5,000 U.S. based companies ended the week at 12,289.26, up 162.34 points from last week. A year ago, the index was 11,058.70.