Wall Street advanced solidly yesterday to finish the week higher as oil prices cooled and investors embraced signs that the economy could...
NEW YORK — Wall Street advanced solidly yesterday to finish the week higher as oil prices cooled and investors embraced signs that the economy could move forward despite Hurricane Katrina’s devastation of the Gulf Coast. The major indexes gained for the week.
The Dow Jones industrial average climbed 82.63 to 10,678.56.
Microsoft, one of the 30 Dow stocks, slipped 3 cents yesterday to close at $26.58, falling 1.6 percent for the week. Boeing, also a Dow stock, gained 81 cents yesterday to $65.40, up 1.6 percent for the week.
Broader stock indicators also gained ground. The Standard & Poor’s 500 index rose 9.81 to 1,241.48, and the Nasdaq composite index advanced 9.48 to 2,175.51.
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Light trading volume — typical of a late-summer session — persisted on Wall Street, as investors awaited more information about the rising damage toll left by Katrina and searched for any signals that the economic retreat will be less than feared.
Nonetheless, falling oil prices led to a strong week for Wall Street. The Dow gained 2.2 percent, the S&P climbed 1.9 percent and the Nasdaq rose 1.6 percent for the week.
Falling energy prices lent to a brighter economic picture in Katrina’s wake, with crude oil sliding despite worries about record-high energy costs this winter and continued refinery shutdowns and gasoline futures slipping below $2 a gallon. Investors anticipated a burst of activity once reconstruction begins in the Gulf region.
“The market seems to be concentrating on the future rebuilding of the devastated area, and I think that’s what’s keeping the market from declining,” said Peter Cardillo, chief strategist at S.W. Bach.
Revised forecasts from chipmakers Texas Instruments and Intel late Thursday bolstered the market with indications that consumer spending remains healthy. Texas Instruments raised its quarterly estimates — fueling hopes for greater electronics demand and calming fears of a spending slowdown — while rival Intel refined its previous view.
Stocks also were helped this week by the growing belief among investors that the Federal Reserve will halt its yearlong string of interest-rate increases when it meets later this month, in part to contain lending costs for Gulf Coast reconstruction. But one analyst expressed confidence that the Fed will lift the nation’s benchmark rate by another quarter-point despite concerns about inflation and the storm.
“Right now, I believe they will raise the rate by 25 basis points. They have been very clear telegraphing what they plan to do,” said Paul Cherney of Cherney Market Analysis. “They’re going to have to address [Katrina’s impact] in some fashion, but they’ll probably use plain vanilla, uninspiring wording.”
Oil futures traded lower even after the Department of Energy said domestic energy costs this winter would be the highest in 10 years, and that at least four Gulf Coast refineries would remain closed for months. A barrel of light crude dropped 41 cents to $64.08 on the New York Mercantile Exchange; gas futures declined 7.6 cents to $1.96 a gallon.