Despite rain, wind and gloom of gas prices, U.S. stocks still posted their best third-quarter gains in eight years.

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Despite rain, wind and gloom of gas prices, nothing stayed U.S. stocks from posting their best third-quarter gains in eight years.

The Dow Jones Industrial Average rose 2.9 percent in the July-September period, its first quarterly gain this year. The 30-stock Dow closed out the quarter yesterday by gaining 15.92 points, closing at 10,568.70, up 1.4 percent for the week.

Other broad U.S. indices fared as well or better. The S&P 500 gained 1.13 points yesterday, up 1.1 percent for the week and 3.2 percent for the quarter. The technology-rich Nasdaq composite index rose 10.47 points, up 1.6 percent for the week and 4.6 percent for the quarter.

“There’s an old saying that if a market doesn’t go down on bad news, it’s destined to go up,” said Carl Marker of IMS Capital in Portland. “This market has digested high oil prices, Katrina and Rita, rising interest rates, not a lot of progress in Iraq — and we’ve taken all this stuff in stride.”

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But whether the markets can maintain that resilience for the rest of the year will depend on the continuing after-effects of hurricanes Katrina, Rita and Alan — as in Federal Reserve Chairman Alan Greenspan, whose continued campaign of raising short-term interest rates has begun to worry some economists and market watchers.

“It appears the Fed is willing to sacrifice economic growth to keep down inflation,” said John Derrick, research director for U.S. Global Investors in San Antonio, Texas.

Higher rates, which discourage people from borrowing, and persistently high prices for gasoline and home heating fuels are likely to inhibit consumer spending — not good news for retailers.

“It’s hard to make a case for a strong Christmas out of all this,” said Ernie Ankrim, chief investment strategist for Tacoma-based Russell Investment Group.

Consumer-oriented companies, in fact, were among the third quarter’s worst performers — especially those aimed at low- or moderate-income people, those most likely to be pinched by filling their tanks.

But thrifts and mortgage lenders, whose business typically suffers as rates rise, were the worst-performing industry last quarter: down 11.8 percent. (Seattle-based Washington Mutual, which has tried to diversify from its dependence on the mortgage business, was down 3.6 percent for the quarter.)

It was a good quarter, however, for companies that turn raw materials into the building blocks of the economy.

Energy and utility stocks were the quarter’s strongest sectors nationally, as Katrina and Rita disrupted Gulf Coast oil and gas production and drove up prices. And as prices for gold, steel and other metals rose, so did the stocks of metal producers and mining companies: The top Northwest stock this quarter, with a 62.1 percent gain, was Oregon Steel Mills.

But stock watchers disagree on whether those industries will continue to outperform.

Russell’s Ankrim, who expects moderate economic growth next year, doesn’t think so: “In a slowing economy, commodities generally and oil specifically will be more prone to disappointments than positive surprises.”

But U.S. Global’s Derrick, while agreeing that “2006 is shaping up to be a tough year,” takes the opposite view.

“We feel we’re in a secular bull market for energy and commodities in general,” he said. “I don’t think we’re going back to $30-a-barrel oil.”

The relatively strong market this summer spurred dozens of companies to go public while they could. According to Seattle Times analysis of Bloomberg News data, more companies — 94 — completed IPOs in June, July and August than in any three-month period since mid-2000. (The pace slowed in September, with 17.)

Only one of those new stocks was from the Northwest: MWI Veterinary Supply of Meridian, Idaho. The company raised $73.7 million in its August IPO; trading under the symbol MWIV, its shares closed yesterday at $19.95, up 17.4 percent from their IPO price. (One Northwest IPO is pending, that of Medford, Ore.-based Harry & David Holdings.)

Bellevue-based Expedia rejoined the ranks of Northwest public companies in August, when it was spun off from InterActiveCorp, Barry Diller’s e-conglomerate. But since the company began trading under its old symbol, EXPE, Expedia shares have lost $4.11, or 17.2 percent, finishing the quarter at $19.81.

There were a few identity changes among Northwest companies. Spokane-based WestCoast Hospitality adopted the name of its main lodging chain, becoming Red Lion Hotels and trading under the symbol RLH.

And after Quinton Cardiology Systems of Bothell merged with Irvine, Calif.-based Cardiac Sciences, the combined company called itself Cardiac Science (ticker symbol CSCX) but kept its headquarters here.

Drew DeSilver: 206-464-3145 or