- The Washington Times - Tuesday, August 17, 2004

NEW YORK (AP) — Another jump in oil prices pre-empted a strong rally on Wall Street yesterday, though stocks managed to post modest gains on the strength of a consumer price report that put many investors’ inflation fears to rest for the near term.

The three major indexes all finished the session higher, showing resiliency in the face of a new record high in oil futures fueled by continuing problems for Russian oil giant Yukos. A barrel of light crude was quoted at $46.75, up 70 cents, on the New York Mercantile Exchange.

Stocks managed to stay in positive territory thanks to a better-than-expected Consumer Price Index reading. The CPI registered a small drop in July, giving consumers a respite from soaring energy prices. With consumer spending being one of the main drivers of the economy, the news cheered investors who have been concerned that higher oil prices could spur inflation.

The Dow Jones Industrial Average rose 18.28, or 0.2 percent, to 9,972.83.

Broader stock indicators were moderately higher. The Standard & Poor’s 500 index was up 2.37, or 0.2 percent, at 1,081.71, and the Nasdaq Composite Index gained 12.41, or 0.7 percent, to 1,795.25.

According to the Labor Department, the CPI fell 0.1 percent in July, the first drop in prices since November and a large shift from the price gains in May and June. Without food and energy costs factored in, the CPI rose 0.1 percent, less than Wall Street had forecast.

Housing construction also saw better-than-expected gains, with the Commerce Department reporting an 8.3 percent increase in home and apartment construction in July, more than making up for the 7.7 percent drop in June.

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