- The Washington Times - Friday, September 24, 2004

NEW YORK (AP) — Bargain hunters kept Wall Street mixed yesterday, allowing blue chips to rise despite a record high for oil prices. But fresh warnings from semiconductor firms sent the tech sector falling, and the three major indexes ended the week substantially lower.

Oil prices pushed past the previous record close of $48.70 on Aug. 19, renewing investors’ fears of $50-per-barrel prices. A barrel of light crude for November delivery settled at $48.88, up 42 cents, on the New York Mercantile Exchange.

Investors got a lift earlier in the session from a Commerce Department report on durable goods orders for August. While orders for goods designed to last three or more years fell 0.5 percent for the month, a large falloff in aircraft orders was to blame. Without transportation equipment, durable goods orders actually rose a strong 2.3 percent — a sign that businesses and consumers may have started spending again after a nervous summer.

“Manufacturing seems to be going in the right direction, but the markets continue to yawn,” said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers. “And with oil, I think, with the potential to crack $50 per barrel, it doesn’t give us a lot of reasons to move substantially higher.”

The Dow Jones Industrial Average rose 8.34, or 0.1 percent, to 10,047.24.

Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index gained 1.75, or 0.2 percent, to 1,110.11, and the Nasdaq Composite Index was down 6.95, or 0.4 percent, at 1,879.48.

For the week, the Dow fell 2.6 percent, the S&P; was down 1.2 percent and the Nasdaq dropped 0.8 percent. Overall, it was the worst week for the markets since the first week of August.

As in August, oil prices weighed heavily on stocks through the week, but profit warnings and disappointing earnings from a wide range of companies — including Morgan Stanley, Wendy’s International Inc., General Mills Inc., Colgate-Palmolive Co. and Unilever PLC — also drove prices lower as investors feared a worse-than-expected earnings season next month.

Consumers’ appetite for large purchases, which help fuel economic growth and benefit earnings, remained uncertain after the National Association of Realtors reported a drop in existing home sales in August. The association said 6.54 million homes were sold for the month, fewer than economists expected and down from 6.72 million in July.

Yesterday’s economic data, however, had little impact on investors, who seemed to be bargain-hunting after the week’s substantial losses.

“The economic data is sending us mixed signals, good but really not great,” said Bill Groenveld, head trader at vFinance Investments.

“We’re down this week, but if we can level off here for the next few weeks, if we can get some stability, I think we’ll be set up nicely for the end of the year.”

While the durable goods report was a boon to most manufacturers, aircraft manufacturers have been struggling. Boeing Co. Chairman Harry Stonecipher told Chinese media the recovery in the aerospace sector would be far slower than European rival Airbus has claimed. Boeing nonetheless climbed 14 cents to $53.14.

The technology sector was hit by another pair of profit warnings. Netherlands manufacturer Philips Electronics NV lost 26 cents to $22.95 after it warned that its semiconductor sales in the third quarter would be flat compared to the previous quarter, reducing its previous outlook.

And consumer electronics maker Cirrus Logic Inc. lowered its sales forecast for the current quarter due to slow sales and high customer inventories. Cirrus Logic lost 19 cents to $4.89.

Shares of mortgage giant Freddie Mac climbed 21 cents to $64.59 despite the company’s announcement that it reduced its overall 2003 earnings to reflect a $75 million reserve to be used for legal proceedings.

The announcement came as sister company Fannie Mae was sharply criticized by the government for its accounting practices. Fannie Mae was down $1.64 at $65.51.

Starbucks Corp. rose 37 cents to $45.04 after the coffee retailer said it would purchase up to 9 million shares in a stock buyback program.

Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume came to 1.25 billion shares, compared with 1.28 billion at the same point Thursday.

The Russell 2000 index of smaller companies was up 0.17, or 0.03 percent, at 565.97.

Overseas, Japan’s Nikkei stock average fell 1.1 percent. In Europe, Britain’s FTSE 100 closed up 0.2 percent, France’s CAC-40 climbed 0.6 percent for the session and Germany’s DAX index gained 0.1 percent.

Copyright © 2019 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