- The Washington Times - Tuesday, December 28, 2004

NEW YORK (AP) — Wall Street resumed its year-end rally yesterday, bolstered by a report that showed consumer confidence had jumped sharply in recent weeks. All three major indexes reached multiyear highs in light holiday-week trading.

Investors welcomed the Conference Board’s latest reading of the Consumer Confidence Index, which rose to 102.3 in December from 92.6 in November. Wall Street had expected a reading of 94. In a trading week that traditionally carries little news, the better-than-expected reading had a stronger-than-usual influence on trading.

Although the dollar reached another low against the euro, falling crude oil futures helped boost investor sentiment and reverse Monday’s losses. Oil prices stabilized after falling 7 percent on Monday. A barrel of light crude settled at $41.77, up 45 cents, on the New York Mercantile Exchange.

“The consumer-confidence figure was very telling, confirming what we’ve seen in consumer spending and job growth,” said Kevin Caron, market strategist for Ryan, Beck & Co. “And we’re seeing energy prices cooperate nicely, as well.”

The Dow Jones Industrial Average rose 78.41, or 0.73 percent, to 10,854.54, surpassing the previous 3-year high set Thursday. It was the best close for the Dow since June 13, 2001.

Broader stock indicators were moderately higher. The Standard & Poor’s 500 index was up 8.62, or 0.72 percent, at 1,213.54, the highest close for the index since Aug. 3, 2001. The Nasdaq Composite Index gained 22.97, or 1.07 percent, to 2,177.19, its best showing since June 8, 2001.

Stocks recovered from Monday’s dip, when investors worried about the economic impact of the Asian earthquake disaster. Analysts said that although events may cause more pauses in the market’s recent rally, the overall upward trend in stocks likely would continue through January.

“The financial impact on the global economy and the U.S. economy is likely to be minimal,” James Wong, senior equity strategist at Payden & Rygel Investment Management, said of the quake and resulting tsunamis. “And as for today, the consumer confidence numbers clearly had an impact. It shows the consumer is still very much in the ballgame when it comes to driving the economy.”

Blockbuster Inc. lost 6 cents to $9.33 after the company said it will make an $11.50-per-share tender offer for rival video rental chain Hollywood Entertainment Corp. if the latter refuses to negotiate a takeover. Hollywood added 7 cents to $13.16 on the news, the latest in a string of merger and acquisition activity that many on Wall Street see as a sign of health in the economy.

Amazon.com Inc. was upgraded to “outperform” from “peer perform” by Bear Stearns after the company enjoyed a strong holiday shopping season, including setting a single-day sales record. Amazon.com gained $2.38 to $44.63.

Bolstered by a strong holiday season, Swift Transportation Co. Inc. raised its fourth-quarter profit forecasts, citing strong demand for shipping from retailers and higher fuel surcharges. Swift jumped 68 cents to $21.77.

Starwood Hotels & Resorts Worldwide Inc. was up 81 cents at $59.46 after the company said its Sheraton hotels in Southeast Asia suffered no structural damage from this week’s earthquake and tidal waves. The hotelier said its properties there are “operating close to normal.”

Advancing issues outweighed decliners by nearly 3-to-1 on the New York Stock Exchange, where preliminary consolidated volume came to 1.25 billion shares, compared with 1.17 billion on Monday.

The Russell 2000 index of smaller companies was up 10.23, or 1.59 percent, at 654.57, a record high.

Overseas, Japan’s Nikkei stock average rose 0.54 percent, Germany’s DAX index was up 0.62 percent and France’s CAC-40 gained 0.19 percent for the session. London markets were closed for the Christmas holiday.

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