Closing Market Report
Star-Bulletin news services

Katrina’s aftermath
sinks Wall Street

NEW YORK » Stocks skidded yesterday in the devastating aftermath of Hurricane Katrina, which slammed the Gulf Coast, pounding hotels and casinos, constricting oil refinery capacity and leaving insurers to cover losses estimated as high as $25 billion.

While major indexes gained Monday when the storm weakened, Wall Street's spirits sank yesterday after the nation's top disaster relief official called the hurricane "catastrophic," oil prices climbed and stocks in affected sectors continued to drop. The Dow Jones industrial average was down more than 100 points in late afternoon trading, but narrowed its losses toward the close.

Crude oil futures hit record highs on fears that already tight refinery capacity would be further constrained as TV reports asserted widespread refinery shutdowns along the Gulf Coast and the Coast Guard said seven rigs were adrift in the Gulf of Mexico. A barrel of light crude settled at $69.81, up $2.61 a barrel on the New York Mercantile Exchange.

Notes released from the Federal Reserve's last policy maker meeting further aggravated equity investors. The notes signaled that rate hikes could continue into 2006 and said inflation had "ticked up" since the policy makers' previous meeting but indicated they decided not to accelerate the pace of short-term interest rate hikes "for now."

The Dow closed down 50.23, or 0.48 percent, at 10,412.82.

Broader stock indicators also dropped. The Standard & Poor's 500 index fell 3.87, or 0.32 percent, to 1,208.41, and the Nasdaq composite index fell 7.89, or 0.37 percent, to 2,129.76.

The U.S. dollar was mixed against other major currencies in European trading. Gold prices were lower.

Bonds soared on higher oil prices, the Fed's notes and stocks' declines, with the yield on the 10-year Treasury note down to 4.10 percent from 4.17 percent late Monday.

The already troubled airline sector, which has been buffeted by labor troubles, pension costs and high oil prices, drooped. AMR Corp. fell 71 cents to $12.69; Northwest Airlines Corp. fell 25 cents to $4.94 and Delta Air Lines fell 7 cents to $1.20.

Oil companies continued to trade higher. Chevron Corp. rose $1.03 to $60.54; ConocoPhillips rose $1.34 to $64.41. Valero Energy Corp. rose $4.91 to $96.79 after shareholders of Premcor Inc., one of the nation's largest independent refiners, agreed to Premcor's purchase by Valero. Premcor fell $8.32 to $73.29 before trading was halted while the final shareholder vote was tallied.

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by Financials.com

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