- The Washington Times - Wednesday, September 1, 2004

NEW YORK (AP) — Stocks had a mixed finish yesterday as lower-than-expected manufacturing activity and rising oil prices checked an early run of bargain hunting, but technology shares posted a modest advance.

Adding an element of gloom to a market already made sluggish by lackluster trading, oil prices settled higher for the first time in seven sessions. Government data showed a steep drop in U.S. oil inventories last week as imports fell and refiners continued to operate at unusually high rates, sending light crude for October delivery soaring $1.88 to $44 on the New York Mercantile Exchange.

Underscoring how exaggerated market moves can be when volume is light, the major indexes sank at midday on reports of a possible terror attack in Washington. The market stabilized after it became clear that the incident stemmed from the accidental release of pepper spray in a restaurant near the World Bank and International Monetary Fund, which are under heightened alert. Still, Wall Street never fully regained its earlier momentum.

“When you combine the rise in oil prices with the false-alarm bioterrorist alert, both of those events really took the steam out of the market,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC.

According to final results, the Dow Jones Industrial Average closed down 5.46, essentially flat, at 10,168.46.

Broader stock indicators were narrowly higher. The Standard & Poor’s 500 Index rose 1.67, or 0.2 percent, to 1,105.91. The tech-focused Nasdaq Composite Index gained 12.31, or 0.7 percent, to finish at 1,850.41.

With trading light, as it has been all week because of the Republican National Convention and the upcoming Labor Day holiday, the markets were slow to react to the Institute for Supply Management’s manufacturing index for August. Manufacturing activity rose for the 15th consecutive month, suggesting healthy activity in the sector, but the reading of 59 was three points lower than the one recorded for July and fell short of economists’ expectations.

Many market participants were looking ahead to tomorrow, when the Labor Department was to release its data for August. After two months of anemic employment growth, Wall Street is hoping for a surge in new jobs.

“The market really needs to see some positive economic statistics, and we haven’t been getting them lately,” said Brian Williamson, an equity trader at the Boston Company Asset Management. “The next few days are going to be critical to see where we stand and to see whether or not we’re in an economic soft patch … or if we’re in a slump.”

Sagging monthly sales figures from the nation’s two largest automakers offered little encouragement. General Motors Corp. lost 10 cents to $41.21 and Ford Motor Co. declined 21 cents to $13.90 after the companies said production cuts could dent fourth-quarter profits.

Intel Corp.’s midquarter report was expected to highlight what’s ahead for the tech sector. Although there has been some concern that a negative outlook from the chipmaker would weigh heavily on tech shares, a round of analyst downgrades and lowered forecasts spurred speculative buying, leading analysts to surmise that investors already might have factored in a mediocre forecast. Intel ended the day up 14 cents at $21.43.


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