Market Slide Slows; Energy Futures Plunge
Wall Street on Thursday had its best showing of the week, as selling pressures abated somewhat and most key indexes closed with narrow losses.
In commodities markets, energy prices fell sharply after a report showed a surge in U.S. gasoline inventories. Treasury bond yields continued to slide, as did the dollar.
In the stock market, the Dow was off as much as 121 points at midday, but prices rallied sharply in the final two hours. The Dow closed with a loss of 11.35 points, at 9,911.69.
The Nasdaq composite turned a 17-point loss at its low into a 7.53-point gain by the close. It ended at 1,631.92.
Some traders said they were surprised by the market’s rebound because the news didn’t appear to improve as the day progressed.
Early in the session the market was depressed by growing concern about a major Pakistan-India military clash and by the U.S. government’s report that the number of workers who qualify to draw unemployment benefits rose for a fifth week--suggesting that the economic recovery could be stalling.
“Investors are uncomfortable, uneasy, nervous,” said Hugh Johnson, chief investment officer at First Albany Corp.
Still, losers just edged winners by 17 to 15 on the New York Stock Exchange and by 18 to 17 on Nasdaq.
Stocks may have been helped by lower energy prices. Gasoline futures fell to a seven-week low in New York, pulling crude oil lower, after an American Petroleum Institute report showed unexpectedly high U.S. inventories at the start of the peak-demand summer season, Bloomberg News reported.
Gasoline inventories rose 1.4% to 218 million barrels in the week ended last Friday, the industry group said. The gain left supplies 6% higher than a year earlier.
“We’re well-supplied going into the summer,” John Kilduff, senior vice president of energy risk management at Fimat USA Inc. in New York, told Bloomberg News.
Gasoline futures fell 3.9 cents to 73.4 cents a gallon. Crude oil futures slid $1.09 to $24.67 a barrel, the lowest since April 15. Oil prices topped $29 a barrel in mid-May.
Also in energy trading, natural gas prices had their biggest drop in five months after an Energy Department report showed a larger-than-expected inventory gain.
The jobless-benefits data helped drive more investors into Treasury securities, perhaps betting that the Federal Reserve will delay tightening credit this year.
The 10-year Treasury note yield fell to 5.02% from 5.06% on Wednesday, and now is the lowest since March 5. Shorter-term yields were largely unchanged, however.
The dollar continued to slump against key currencies. It fell to a six-month low against the yen after Bank of Japan Governor Masaru Hayami suggested that the central bank was unlikely to sell more yen soon to curb the currency’s advance. The dollar ended at 123.05 yen in New York, down from 124.34 on Wednesday.
Meanwhile, the euro edged up against the dollar, to 93.8 cents.
The weak dollar is depressing foreign investors’ appetite for U.S. stocks, many analysts say.
Among Thursday’s highlights:
* Brokerage stocks were broadly lower on fears about continuing state and federal investigations into research analysts’ credibility. Morgan Stanley fell $1.40 to $44.64, Merrill Lynch lost $1.15 to $40.76, and Goldman Sachs was off $1.07 at $75.08.
* Tyco International closed up 37 cents at $21.50 after rising as high as $22.50 after rumors spread that Chief Executive Dennis Kozlowski had resigned. Tyco, which has been dogged by concerns about its accounting, said the rumors were “absolutely false.”
* Among blue chips, Procter & Gamble rebounded $1.73 to $88.75; Coca-Cola rose 24 cents to $54.39.
* Defense shares resumed their rally after recent profit taking. General Dynamics climbed $1.25 to $99.80, Raytheon was up $1.70 to $44.60, and Northrop Grumman added $1.06 to $123.06.
* Health-care services providers attracted buyers. WellPoint Health Networks gained $2.13 to $74.92, and Tenet Healthcare jumped $1.22 to $74.20.
* Overstock.com, an initial public offering priced Wednesday at $13 a share, rose slightly to close at $13.03 on Nasdaq.
* Energy stocks followed oil prices lower. Exxon Mobil fell 95 cents to $39.35, ChevronTexaco lost $1.10 to $86.80, and Burlington Resources slid $1.94 to $40.27.
Market Roundup, C5-6
