Closing Market Report

Star-Bulletin news services

Friday, July 30, 2004

Stocks inch higher,
led by the Nasdaq

NEW YORK >> Oversold tech shares led Wall Street higher yesterday as investors brushed off high oil prices and brokerage downgrades of General Motors Corp. and focused on strong earnings.

Stocks were flat to moderately higher through much of the session, but few analysts believed there was much conviction in the day's buying. The equity markets have traded in a narrow band for more than a month amid rising nervousness about slower second-half growth and the potential for terror attacks ahead of the presidential election and the Olympics.

"We haven't had much of a follow-through today. I imagine it won't be long before we retest the lows," said David Hegarty, head trader at Commerzbank Securities. "To make us go higher from here ... we're going to have to have some sort of chatter, some sort of guidance for '05 that things will look better."

At the close of trading, the Dow Jones industrial average was up 12.17, or 0.1 percent, at 10,129.24.

The broader gauges were also higher. The Nasdaq composite index, rebounding from a loss Wednesday and weeks of selling, added 22.80, or 1.2 percent, to 1,881.06. The Standard & Poor's 500 index gained 5.01, or 0.5 percent, to 1,100.43.

In economic news, the Labor Department reported a moderate 0.9 percent rise in wages and benefits for U.S. workers in the April-June quarter, down slightly from the previous quarter's increase. In a second report, the department said new claims for unemployment benefits edged up last week, though they remain at a level that suggests continued labor market improvement.

Climbing crude prices added to the market's uneasiness. Down substantially earlier in the session, September crude futures settled only 15 cents lower at $42.75 on the New York Mercantile Exchange. A dispute between Russian oil giant Yukos and Moscow briefly pushed oil prices past $43 a barrel on Wednesday, a 21-year high.

Stock trading remained light yesterday, which analysts attributed in part to anticipation of the government's gross domestic product report, due today.

"I think (today) is a big day ... nobody wants to be out in front of that," said Michael Murphy, head trader at Wachovia Securities in Baltimore. "The economy is very much on investors' minds. It's a trigger point. If it's a bad number, I think we'll see a sell-off, but if it's a good number we'll probably celebrate."

General Motors was down 3.1 percent, or $1.37, at $42.75, after analysts with Goldman Sachs and Lehman Brothers downgraded their ratings of the stock, amid worries about inventory buildup and a pending accounting rule change that could dent earnings.

MetLife Inc. added $1.23 to $35.53 after reporting a 45 percent gain in second quarter profits, soaring past Wall Street forecasts.

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