Wall Street rallied to finish mostly higher yesterday, capping off the week with two days of gains as Hurricane Rita lost strength and raised...
NEW YORK — Wall Street rallied to finish mostly higher yesterday, capping off the week with two days of gains as Hurricane Rita lost strength and raised hopes that its impact on key Gulf Coast refineries wouldn’t be as bad as initially feared.
At the close of trading, the Dow dropped 2.46 to 10,419.59, after sliding as much as 49.75 in early activity. For the week, the Dow lost 2.1 percent.
Microsoft, one of the 30 Dow stocks, slipped 7 cents yesterday to close at $25.27, down 3.1 percent for the week. Boeing, also a Dow stock, gained 69 cents to $63.20, off 2.5 percent for the week.
The broader stock indicators moved higher. The Standard & Poor’s 500 index rose 0.67 to 1,215.29, and the Nasdaq gained 6.06 to 2,116.84. For the week, the S&P declined 1.8 percent and the Nasdaq ended 2 percent lower.
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But trading volume remained light while traders kept an eye on the storm, projected to strike the Texas-Louisiana border early this morning.
With Rita headed for the Texas coastline — the heart of U.S. oil production — investors had braced for a repeat of the devastation caused by Hurricane Katrina last month. By yesterday afternoon, however, Rita weakened two notches to a Category 3 hurricane, sending oil prices down more than $2 and easing the mood on Wall Street.
Crude oil also surged past $68 a barrel this week amid growing concerns about Rita’s potential to further ravage Gulf Coast oil production. Yesterday, a barrel of light crude sank $2.31 to settle at $64.19 on the New York Mercantile Exchange (Nymex).
“I think whenever you have something that’s an event that could create news over the weekend, people get a little more cautious about putting money on the table,” said Susan Malley, chief investment officer for Malley Associates Capital Management.
Nymex will open electronic trading at 10 a.m. Eastern time tomorrow, rather than the usual 7 p.m., in order to accommodate traders seeking to ensure crude deliveries for future months.
Nymex crude-oil prices are more than 40 percent higher than a year ago, though still below the intraday record of $70.85 set Aug. 30 when Katrina struck Louisiana, damaging numerous refineries and platforms and shutting down production.
Stocks plunged early in the week, hammered by concerns about an economic slowdown as oil and gas prices edged near record levels and following the Federal Reserve’s decision to raise the nation’s interest rates an 11th consecutive time.
The Dow posted three straight days of hefty losses, giving up more than 250 points through Wednesday.
Software maker Oracle said it squeezed out a slight rise in first-quarter profit. But despite a bigger profit, analysts were disappointed by the company’s database software sales, which rose just 2 percent last quarter. Oracle dropped $1.07 to $12.45.
Palm, maker of the Treo smart phone, said higher costs and slumping sales of digital organizers drove a 7 percent decline in quarterly earnings.
The company also pegged its second-quarter profit well below Wall Street targets, citing strong overseas competition.
Palm lost $6.28, or 18 percent, to $28.69.
Meanwhile, Alcoa also warned Thursday that its third-quarter earnings would miss analysts’ expectations, as soaring energy and raw-material costs exacerbate a revenue shortfall from sliding aluminum prices.
Alcoa said its results will also be affected by Rita, which forced it to close several facilities in the storm’s path. Alcoa slumped $1.48 to $24.42.