- The Washington Times - Wednesday, August 4, 2004

NEW YORK (AP) — Wall Street worked through an erratic session yesterday, closing mixed as investors nervously watched oil prices but also allowed themselves to be encouraged by good economic news.

Stocks moved in the opposite direction from oil prices for much of the day, declining until early afternoon as crude climbed to $44.34 a barrel on the New York Mercantile Exchange. As oil fell below $43 on the way to a $42.83 close, Wall Street managed a late-session rally that quickly fizzled.

Still, the market’s tone kept analysts and traders optimistic about long-term prospects, though many cautioned that the typical summer doldrums likely would prevent a major rally this month.

“Yes, we have oil prices rising, but I think overall we’re starting to see some settling down in the market,” said Bill Groenveld, head trader for VFinance Investments. “All the unknowns that drove the market down in July are starting to pan themselves out. There may be a malaise in the marketplace for a while, but it’s better than uncertainty.”

Stocks also received a boost from two key economic reports. Factory orders rose 0.7 percent in June, more than Wall Street expected, and the Institute of Supply Management’s service-sector index for June rose more than economists had forecast.

The Dow Jones Industrial Average rose 6.27, or 0.1 percent, to 10,126.51.

Broader stock indicators were lower. The Standard & Poor’s 500 index was down 1.06, or 0.1 percent, at 1,098.63, and the Nasdaq Composite Index dropped 4.36, or 0.2 percent, to 1,855.06.

Although the rally lost wind at the end of the session, the Dow enjoyed its fourth late-day rally in the last six sessions.

Oil prices remain a concern, because higher fuel costs could trickle down to the consumer as food producers and major retailers pay higher costs in shipping.

But yesterday’s economic figures were an encouraging sign that the economy’s spring “soft spot” may not have lasted. Factory orders for June were higher than the 0.4 rise in May. Orders for durable goods rose 0.9 percent in June, up from a 0.9 percent decline in May, the Commerce Department said.

A test for the economy and the markets will come tomorrow as the government releases the latest data on job creation.

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