Stocks rebound as storm veers off
NEW YORK » Wall Street rebounded yesterday as energy prices fell on signs that Tropical Storm Ernesto won't hit the Gulf of Mexico and as investors grew optimistic about a series of major economic reports on tap this week.
Retail and transportation stocks rose as investors believed lower oil prices would help consumer spending. The drop in energy prices also massaged concerns that this week's data on consumer confidence, job growth, and manufacturing might show the economy is slowing faster than expected.
The market's advance came amid light summer volume, which is expected to remain thin until after Labor Day. Investors did get a handful of company announcements yesterday, including Google Inc. and auction Web site eBay Inc. forming an advertising alliance.
Meanwhile, Kinder Morgan Inc.'s board agreed to take the natural-gas pipeline operator private, and Western Refining Inc. said it was acquiring Giant Industries Inc.
"The message of this week is 'if a tree falls in the forest, and there's nobody there, will it make noise?'" said Larry Peruzzi, a trader with Mellon Financial's Boston Co. Asset Management. "The market is just looking to head up, not get taken down, and sets up the table for September."
The Standard & Poor's 500 added 6.69, or 0.52 percent, to 1,301.78 -- near a three-month high. Powering the index were components Altria Group Inc. and PepsiCo Inc., which touched on historic highs, and Coca-Cola Co. coming within pennies of a 52-week high.
Other major stock indicators also advanced. The Dow jumped 67.96, or 0.60 percent, to 11,352.01, recovering somewhat from last week's loss of 0.86 percent. The Nasdaq composite index, also near a three-month high, picked up 20.41, or 0.95 percent, to 2,160.70.
Energy prices retreated as it appeared Ernesto would likely swipe Florida instead of key oil and gas platforms in the Gulf of Mexico. A barrel of light, sweet crude tumbled $1.90 to $70.61 on the New York Mercantile Exchange.
The declines were welcomed by Wall Street after last week's economic data showed a sharp drop in new and existing home sales. The data prompted concerns about the economy, and threw into question the Federal Reserve's hope for a soft landing as a result of its string of 17 interest rate hikes.
Investors will be looking for clues as to the Fed's next move from this week's economic data, starting with the Conference Board's consumer confidence report today.