- The Washington Times - Monday, October 4, 2004

NEW YORK (AP) — Wall Street extended its fourth-quarter rally into a second day yesterday, supported by falling oil prices and a bullish assessment of the economy from a Federal Reserve official.

Investors were cheered by a dip in oil prices, which backed off the $50 per barrel mark at Friday’s close of trading. A barrel of light crude closed at $49.91, down 21 cents, on the New York Mercantile Exchange.

Stocks received a boost before the session opened when Philadelphia Federal Reserve President Anthony Santomero said in a speech that he expected the economy to grow by 3.5 percent to 4 percent through 2005. His comments and the buying that customarily opens a new quarter gave stocks their gains — although analysts said recent economic data and the forecast for third-quarter earnings might not support the bullishness.

The Dow Jones Industrial Average rose 23.89, or 0.2 percent, to 10,216.54, its second straight positive session. The Dow climbed 112.38 on Friday.

Broader stock indicators were moderately higher. The Standard & Poor’s 500 index was up 3.67, or 0.3 percent, at 1,135.17, and the Nasdaq Composite Index gained 10.20, or 0.5 percent, to 1,952.40.

With the market having advanced four of the last five sessions, investors were growing optimistic about a fourth-quarter rally, and were looking past third-quarter earnings, which many expect to be disappointing. But Friday’s monthly job-creation report, one of the most closely watched reports on the economy, will likely shape trading for weeks to come.

The Commerce Department reported a slim 0.1 percent decrease in factory orders in August, less than the 0.1 percent increase forecast on Wall Street. However, the department boosted July’s factory order increase to 1.7 percent, up from 1.3 percent, showing that the nation’s factories continued to produce at a high rate even during the worst of the summer’s economic slowdown.

Dow component American International Group Inc., one of the world’s largest insurance firms, slipped 23 cents to $68.49 after it announced the Securities and Exchange Commission may sue the company for reputed violations of federal securities laws, based on reputedly misleading statements AIG made in recent press releases.

Wal-Mart Stores Inc., the closely watched bellwether for the retail sector, pleased investors as it announced that sales at its stores open at least a year rose 2.3 percent in September, somewhat making up for a disappointing August. While sales fell compared with a year ago, investors saw the increase as a plus, especially considering the recent lack of consumer spending. The company also approved an additional $3 billion stock-buyback program, adding to a $7 billion program previously announced. Wal-Mart rose 18 cents to $53.31.

Office Depot Inc. gained 6 cents to $15.14 after it announced that Chairman and Chief Executive Officer Bruce Nelson resigned.

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