Wall Street lifted itself out of a fourth day of losses yesterday, closing higher as Hurricane Rita weakened slightly. The Dow Jones industrial...
NEW YORK — Wall Street lifted itself out of a fourth day of losses yesterday, closing higher as Hurricane Rita weakened slightly.
The Dow Jones industrial average rose 44.02 to 10,422.05 after losing nearly 264 points since Monday and falling 27 more points yesterday before turning higher.
Microsoft, one of the 30 Dow stocks, slipped 15 cents to close at $25.34 a share. Boeing, also a Dow stock, added 10 cents to $62.51.
Broader stock indicators also closed up. The Standard & Poor’s 500 index rose 4.42 to 1,214.62, and the Nasdaq composite index rose 4.14 to 2,110.78.
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Crude oil futures fell as fears about the storm lost some intensity. A barrel of light crude settled at $66.50, down 30 cents, on the New York Mercantile Exchange.
Investors bid stocks up as oil prices declined. Stocks that had been doing poorly for weeks, such as retailers and consumer-goods companies, rebounded.
“Maybe it’s one of those things where the balloon was pushed under water so far that it’s bounced to the surface,” said Jon Brorson, head of growth equities at Neuberger Berman in Chicago.
Investors still feared that Rita could compound the damage done by Hurricane Katrina, leading to higher oil prices and a dramatic drop in consumer spending. “It’s all about oil,” said Paul McManus, senior vice president and director of research, Independence Investment. Traders sent their clients weather updates and lists of oil rigs at risk Wednesday morning.
But as the National Hurricane Center downgraded the storm to Category 4 from Category 5 during the afternoon, some investors relaxed a little and starting searching for bargains after three down days.
“Everyone is just sitting back and watching their weather maps,” McManus said.
The Labor Department reported that the number of Americans thrown out of work by Katrina shot up by 103,000 last week, bringing the total seeking jobless benefits because of the storm to 214,000.
Meanwhile, the Conference Board said its Index of Leading Economic Indicators fell for the second straight month during August as consumer sentiment weakened. The data for the index were collected before Katrina’s devastation of the Gulf Coast, and it is likely that the September reading for the index will be even weaker.
Nonetheless, some investors were optimistic that the Fed, despite its decision on Tuesday to continue raising rates, will decide to change its strategy if evidence continues to point to a slower economy.