- The Washington Times - Tuesday, August 31, 2004

NEW YORK (AP) — A late-session buying spurt gave stocks a moderate lift yesterday as investors managed to overcome disappointment over troubling readings on consumer confidence and manufacturing. But with volume extremely light, analysts said it was difficult to place any real significance in the upturn.

The plunge in the Conference Board’s Consumer Confidence Index, from 105.7 in July to 98.2 in August, kept stocks lower for much of the day and raised concerns on Wall Street that a lack of new jobs could extend the economic slowdown of the summer through the third quarter, or perhaps longer. Data on Midwest manufacturing activity also showed a sharp decline for the month.

With oil prices extending their losses, buyers did move back into the market at the end of the session. Still, the turnaround likely was exaggerated because of the light turnover; many investors have stayed out of the market during the Republican National Convention.

“It’s hard to make anything out of this rise with the light trading we’re in right now,” said Brian Pears, head equity trader at Victory Capital Management.

The Dow Jones Industrial Average was up 51.40, or 0.5 percent, at 10,173.92.

Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index gained 5.09, or 0.5 percent, to 1,104.24, and the Nasdaq Composite Index was up 1.61, or 0.1 percent, at 1,838.10.

The major indexes ended August with the Dow rising 0.3 percent and the S&P; edging 0.2 percent higher, while the Nasdaq tumbled 2.6 percent for the month.

The Consumer Confidence Index reading fell far below the 103.5 expected by Wall Street, and, because consumers were focused on jobs, put even more of a focus on the government’s August employment report, scheduled for release on Friday. The government’s payroll figures have been disappointing Wall Street all summer — another lackluster number is likely to recast the economy’s recent slowdown as a larger and more disturbing trend.

The Chicago Purchasing Managers Index, a measure of manufacturing activity in the Chicago area, also fell below expectations, coming in at 57.3 in August, down from 64.7 in July and worse than the 60 forecast by economists. The Chicago PMI is considered a harbinger of the national manufacturing report to be issued today.

“We’re starting to see some reinforcement in the economic data that this is more than just a soft patch for the economy,” said Michael Chren, senior director of value equity investment for the Armada Funds. “I think Friday we’ll have another very powerful data point with the jobs figure coming out, and if that’s lower than expected, that will really throw fuel on the fire.”

Another drop in oil prices took the edge off investors’ concerns, however, and fed the late rally. A barrel of crude was quoted at $42.12, down 16 cents, on the New York Mercantile Exchange, after topping $49 per barrel last week, but investors feared that the damage from weeks of higher prices already may have been done.

Technology shares saw pressure from several reduced forecasts in microprocessors. Intel Corp.’s third-quarter earnings forecast was downgraded by Morgan Stanley, while J.P. Morgan Securities lowered its outlooks for communications chip makers Xilinx Inc. and Altera Corp. Intel shed 31 cents to $21.29, while Xilinx lost 7 cents to $27.43 and Altera fell 16 cents to $18.92.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide