- The Washington Times - Saturday, July 26, 2008

NEW YORK | Wall Street ended a volatile week Friday with a moderate gain after better-than-expected economic data placated a market pummeled a day earlier by concerns about housing and the financial sector.

Financials drifted lower again on continued worries about the health of balance sheets, while a surge in profits at Juniper Networks Inc. lifted technology stocks.

The Commerce Department reported that orders sent to factories for big-ticket manufactured goods such as cars, appliances and machinery rose by 0.8 percent in June, the strongest gain in four months and well ahead of Wall Street’s expectations. But outside demand for defense equipment orders would have increased only modestly.

Another Commerce Department report showed that new home sales dropped by a smaller-than-expected 0.6 percent. While it marked the seventh decline in the past eight months, it stirred some hope that the housing market could be finding a bottom. Investors hit the sell button Thursday after a weak reading on existing home sales.

And there was good news about consumers, whose shyness about spending has troubled Wall Street because consumer spending accounts for more than two-thirds of U.S. economic activity. The Reuters/University of Michigan index of consumer sentiment for the first part of July came in at 61.2, while economists forecast a reading of 56.4. The reading was a slight rebound from a 28-year-low last month.

Linda Duessel, equity market strategist at Federated Investors, said economic figures such as the durable goods numbers are important because they reveal continued demand from abroad, which could help U.S. companies continue to rake in profits even if the U.S. economy isn’t running at full steam.

“That’s good news for market participants as we try to find a footing in the market because we really don’t want to see our weakness leak outside the U.S.,” she said.

The Dow Jones Industrial Average rose 21.41, or 0.19 percent, to 11,370.69. The Dow, which fluctuated at times Friday, fell more than 280 points Thursday.

Broader stock indicators also rose. The Standard & Poor’s 500 Index advanced 5.22, or 0.42 percent, to 1,257.76, and the technology-heavy Nasdaq Composite Index jumped 30.42, or 1.33 percent, to 2,310.53.

A barrel of light, sweet crude fell $2.23 to settle at $123.26 on the New York Mercantile Exchange. Oil prices have fallen more than $20 in recent weeks, alleviating some of Wall Street’s concerns about the impact of inflation consumers’ ability to spend.

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