Wall Street ended an arduous first half quietly today, closing mixed as investors again based their trades on what is now the dominant force...
NEW YORK — Wall Street ended an arduous first half quietly today, closing mixed as investors again based their trades on what is now the dominant force in the market: the price of oil. The major indexes closed out the first six months of 2008 with double digit declines, and are perilously close to the levels of a bear market.
Investors made relatively small bets ahead of coming earnings and as the quarter came to a close.
The Dow Jones industrial average rose 3.50 to 11,350.01.
Microsoft, one of the 30 Dow stocks, slipped 12 cents to close at $27.51 a share. Boeing, also a Dow stock, fell $1.20 to close at $65.72 — a 52-week low and a level not seen since late 2005.
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Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 1.62 to 1,280.00, and the technology-laden Nasdaq composite index fell 22.65 to 2,292.98.
Stocks pulled back in the early going as oil reached yet another record, this time above $143 a barrel. The market then gathered some strength as crude lost momentum and allowed some investors to consider buying equities that have been turned into bargains by months of volatility.
There is little expectation on the Street that the chaos of the first half will soon end. Besides the punishing effect of higher oil, which threatens to stifle consumer spending and, in turn, an economy still struggling to grow, the stock market is still contending with warnings of losses at financial companies, the continuing fallout of the housing slump and the credit crisis that began nearly a year ago.
These problems, which show little sign of being resolved soon, left Wall Street in tatters as the first half ended. The Dow industrials are down nearly 20 percent from their high of 14,198.09, set in October, putting the blue chips on the threshold of a bear market. The market did have a spring recovery, which began in March, but it foundered in May as the combination of credit problems and higher oil rattled investors.
Financial stocks, which were leading the market higher before the credit crisis struck, ended the half with even steeper losses than anyone expected — just a few months ago, there were predictions that the credit crisis would soon end. Airline stocks have been devastated by the rising price of oil. Detroit automotive stocks, as ever battling competition from overseas makers, are also being pummeled by the sagging economy and higher energy prices.
Investors wondering how the markets will fare will likely devote unusual scrutiny to parsing reports on the economy and corporate earnings, which will arrive in force in the coming weeks. And right now, there appears to be little optimism.
“We’ve seen year-over-year estimates decline,” said Christopher Johnson, president of Johnson Research Group in Cincinnati. “It’ll be a critical season.”
Light, sweet crude fell 21 cents to settle at $140.00 a barrel on the New York Mercantile Exchange while retail gasoline set a new national average of $4.086 a gallon, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express.