A drop in crude-oil futures pushed stocks modestly higher yesterday, helped by government predictions of lower gasoline prices. The Dow Jones industrial...
NEW YORK — A drop in crude-oil futures pushed stocks modestly higher yesterday, helped by government predictions of lower gasoline prices.
The Dow Jones industrial average rose 44.26 to 10,633.50. On Tuesday, the Dow rose 141.87, its best one-day gain since July 8.
Microsoft, one of the 30 Dow stocks, slipped 15 cents to close at $26.85 a share. Boeing, also a Dow stock, fell 53 cents to $64.50.
Broader stock indicators were slightly higher. The Standard & Poor’s 500 index rose 2.97 to 1,236.36, and the Nasdaq composite index rose 5.17 to 2,172.03.
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Wall Street was encouraged when oil prices fell below $65 per barrel as more Gulf Coast production facilities resumed operations and traders saw that Katrina’s damage to petroleum infrastructure was less than originally feared. A barrel of light crude settled at $64.37, down $1.59, on the New York Mercantile Exchange.
Large-cap stocks got a bounce after the Energy Information Administration, a division of the Department of Energy, said yesterday morning that it sees U.S. retail gasoline prices falling to $2.58 a gallon in the fourth quarter. The administration also slashed its forecasts for growth in U.S. oil demand this year and next, saying higher costs would deter consumption.
Stocks moved in a narrow band, but trading was choppy as investors took each new piece of news and tried to parse the effects of Hurricane Katrina.
“To an extent, we’re all just groping in the dark to make sense of all the news, all the stories, all the data,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank, adding that much of the data from prior months has been made obsolete by last week. “What are the ripple effects? What will the costs be on a cost front, a delivery front and a psychology front?”
The S&P 500 and Nasdaq composite fell in morning trading after the Department of Labor revised second quarter productivity growth down to a 1.8 percent annual rate instead of the 2.2 percent in a preliminary report. The department also reported an increase in labor costs to 2.5 percent from the 1.3 percent in its preliminary report.
Investors largely discounted the Federal Reserve’s regional “beige book” snapshot of the U.S. economy, which showed manufacturing activity increased in most of the Fed’s 12 regional districts, retail sales and tourism activity strengthened in most regions and the jobs climate improved — all before Katrina hit.
Before the storm, “except for energy, overall consumer price increases were modest,” over the last two months, according to the Fed’s survey.