Closing Market Report
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Rebound in oil prices dampens enthusiasm
By Tim Paradis
Associated Press
NEW YORK » Wall Street advanced for a third straight session yesterday, although the Dow Jones industrial average fell just short of touching its record high close after a jump in oil prices stifled investors' enthusiasm.
Falling crude oil prices and an increase in new home sales had helped investors shrug off a weak durable goods report earlier in the session, putting the Dow 33.74 points away from the closing record of 11,722.98 it set on Jan. 14, 2000.
"I think most of the activity is this push to make a close at all-time highs," Ryan Larson, senior equity trader at Voyageur Asset Management, said of much of yesterday's early movement. He contends Wall Street's expectation that it would surpass the record drove stocks before investors grew wary in part by the rise in oil prices.
"I think it was a little bit exhausted," he said of the idea of a record-breaking day. He said, however, that the market's gains shouldn't be ignored and that optimism remains.
The Dow closed up 19.85, or 0.17 percent, at 11,689.24, its second-best close ever. The Dow has gained 181.14 over the past three sessions.
Broader stock indicators also moved higher. The Standard & Poor's 500 index rose 0.25, or 0.02 percent, to 1,336.59, and the Nasdaq composite index advanced 2.05, or 0.09 percent, to 2,263.89.
The Commerce Department said yesterday that orders to U.S. factories for large manufactured goods fell for a second straight month in August, the first time in more than two years there has been a consecutive decline. Demand for durable goods dropped 0.5 percent last month to $209.7 billion.
Some good news came in a report that new home sales rose 4.1 percent in August, their biggest increase in five months. The Commerce Department data raised hopes that a sharp decline in the housing industry could be easing.
Light crude settled up $1.95 at $62.96 a barrel on the New York Mercantile Exchange.
Wall Street's advance this week, which followed several weeks of sometimes fitful gains, has been fed by growing signs that the economy is moderating, not headed for a hard landing.
Arthur Hogan, chief market analyst at Jefferies & Co., said he doesn't see the overall rise in stocks as being short-lived given that the recent run-up has been based on a range of events, most notably the Federal Reserve's decision to again hold interest rates in place and a decline in price of oil.
"The economy has been doing well and yet the market hadn't been in step with that because we had the specter of high interest rates and rising energy prices," Hogan said.