- The Washington Times - Wednesday, April 6, 2005

NEW YORK (AP) — Stocks closed mixed yesterday as a government report showed an improved supply outlook for oil, and the first day of earnings season forced investors to shift their focus to company news.

Investors were in the early stages of trying to assess what the upcoming profit results might reveal about the economy’s momentum. Wall Street is likely to pay particular attention to the reports from industrials and financial companies as it eyes the effect rising interest rates have had over the course of 2005’s first quarter.

During this period, it’s likely “the market is not going to move dramatically one way or the other,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia, noting that stocks tend to do better in the actual reporting season than during preannouncements.

“It’s been a show-me-the-money kind of market, very reactive, waiting to see the results,” Mr. Kleintop said. “Usually it’s buy on the rumor, sell on the news, but lately the market’s been saying ‘I’ll buy on the news, thank you very much.’”

The Dow Jones Industrial Average rose 27.56, or 0.26 percent, to 10,486.02.

The broader gauges were mixed. The Standard & Poor’s 500 Index added 2.68, or 0.23 percent, to 1,184.07. The Nasdaq Composite Index declined 0.18, or 0.01 percent, to 1,999.14.

While the quality of corporate profits is likely to emerge as the main driver in the weeks ahead, Wall Street is also watching oil prices. A decline in crude coupled with a firmer dollar could help stocks break out of the low end of their current trading range, said Subodh Kumar, chief investment strategist with CIBC World Markets.

“There are two kinds of risks right now. One is oil prices going ever higher, the second is the U.S. dollar going ever lower,” Mr. Kumar said. “So you have to look at both of these things. A firmer dollar is better for capital market risk, and oil prices pulling back may reduce some fears about earnings and consumer spending.”

Financial stocks were among the day’s best gainers as Treasuries continued their rally; the yield on the benchmark 10-year note fell to 4.43 percent from 4.47 percent late Tuesday. The U.S. dollar was mixed against other major currencies. Gold prices rose.

Oil futures settled 19 cents lower at $55.85 on the New York Mercantile Exchange after the government’s weekly fuel supply report, which showed a 2.4 million barrel buildup in crude. There was also a 2.1 million barrel draw in gas inventories, however, which could cause some concern ahead of the summer driving season.

Heralding the start of earnings season, Dow component Alcoa Inc. reported results after the market closed; the aluminum producer said first-quarter profits fell year-over-year due to restructuring charges and other items, but operating profit was in range of expectations. Alcoa, which closed unchanged at $29.98 a share, gained 2.9 percent in after-market trading.

Anheuser-Busch Cos., the nation’s biggest brewer, slid 3.8 percent, or $1.79, to $45.65, after lowering its profit forecast for the year and saying it would step up its marketing efforts following weaker-than-expected U.S. sales.

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