- The Washington Times - Monday, June 20, 2005

NEW YORK (AP) — Wall Street slipped lower but still held on to most of its recent gains yesterday as investors, their confidence in the economy growing, reacted calmly to oil prices that approached $60 per barrel.

Building on last week’s surge in energy prices, crude oil futures reached a new intraday record of $59.52 per barrel, heightening worries that higher prices at the pump would hurt consumer spending and slow economic growth. A barrel of light crude settled at a record $59.37, up 90 cents, on the New York Mercantile Exchange.

The concern over oil stymied hopes of continuing last week’s stock advance, which saw the major indexes climb for five straight sessions. But Joseph Battipaglia, chief investment officer at Ryan Beck & Co. Inc., said investors — who have seen the risk of inflation dwindle and the economy remain on track — were handling the oil situation well.

“Everything else I see, aside from oil, is in place for a good run. Inflation issues have been pretty much satisfied, the Federal Reserve is on a glide path to stopping their interest rate increases. Everything else looks good,” Mr. Battipaglia said. “Stocks aren’t hugely cheap, but they’re still cheap on a relative basis. So if we can get oil back down somewhat, we should be in good shape.”

The Dow Jones Industrial Average fell 13.96 to 10,609.11, ending seven straight sessions of gains, which saw the Dow rise 140 points.

Broader stock indicators were narrowly lower. The Standard & Poor’s 500 index was down 0.86 at 1,216.10, and the Nasdaq Composite Index lost 1.98 to 2,088.13. Both indexes reversed five days in positive territory.

The bond market sold off due to the oil concerns, with the yield on the 10-year Treasury note rising to 4.11 percent from 4.08 percent late Friday. The dollar made gains against most major currencies, and gold prices also rose.

The Conference Board’s latest reading of the index of leading economic indicators showed that the economy could already be slowing faster than many investors expect. The index for May dropped 0.5 percent, more than the 0.3 percent drop Wall Street had expected. The index was unchanged in April.

“The leading indicators are just confirming what we’re seeing in other indicators, that the economy is not falling off a cliff, but it is slowing,” said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco. “It’s well documented, well discounted, but in a way it’s good to see that confirmed.”

In corporate news, Cablevision Systems Corp. may be taken private by its majority stakeholders. The Dolan family, which already exercises control over the company, has presented a $7.9 billion, $33.50 per share offer to take the cable operator private and spin off its entertainment holdings, including New York’s Madison Square Garden, into a different public company. Cablevision surged 19.1 percent, or $5.13, to $32 per share.

Google Inc. rose $6.40 to $286.70 after media reports said the company plans to start an online payment system to rival EBay Inc.’s widely used PayPal service. EBay lost 81 cents to $37.24 as investors worried about the prospects of strong competition in an area currently dominated by PayPal.

Declining issues outnumbered advancers by 9 to 7 on the New York Stock Exchange.

, where preliminary consolidated volume came to 1.7 billion shares, compared with 2.4 billion traded on Friday.

Friday’s heavy trading was prompted by the expiration of options and futures contracts.

The Russell 2000 index of smaller companies was down 2.35, or 0.36 percent, at 641.84.

Embattled automakers Ford Motor Co. and rival General Motors Corp. saw their shares upgraded by Banc of America Securities to “neutral” from “sell.” Analysts there said the possibility of health care concessions from the United Auto Workers would help the companies as they struggle to regain financial footing. Ford nonetheless slipped 17 cents to $11.11, while Dow component GM was up 14 cents at $35.82.

Overseas, Japan’s Nikkei stock average fell 0.27 percent. In Europe, Britain’s FTSE 100 closed down 0.11 percent, France’s CAC-40 dropped 0.65 percent for the session and Germany’s DAX index lost 0.38 percent.

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