Wall Street ended mixed Thursday, its best showing of the week, as both Hurricane Rita and oil prices weakened slightly.
Sectors that had been doing poorly for weeks, such as retail and consumer goods, rebounded, and key indexes were modestly higher. But falling stocks outnumbered winners for a fourth straight session, in continued heavy trading.
Investors still feared that Rita could compound the damage done by Hurricane Katrina, leading to higher energy prices and a drop in consumer spending. “It’s all about oil,” said Paul McManus, director of research at Independence Investment.
Traders sent their clients weather updates and lists of oil rigs at risk Wednesday morning. But as the National Hurricane Center downgraded Rita to Category 4 from Category 5 in the afternoon, some investors relaxed a little and starting searching for bargains after three down days.
The Dow Jones industrial average rose 44.02 points, or 0.4%, to 10,422.05 after losing nearly 264 points in the first three sessions of the week. Gains by McDonald’s and Wal-Mart Stores led the index higher. The Dow had hit an 11-week low Wednesday.
Broader stock indicators also closed up. The Standard & Poor’s 500 rose 4.42 points, or 0.4%, to 1,214.62, and the Nasdaq composite added 4.14 points, or 0.2%, to 2,110.78.
The New York Stock Exchange composite index, however, was up less than 0.1%, and losers topped winners by about 5 to 4 on the Big Board.
Crude oil futures eased as fears about the new storm were damped a bit. A barrel of light crude settled at $66.50, down 30 cents, in New York.
In the Treasury bond market yields were little changed. The 10-year T-note ended at 4.18%, up from 4.17% on Wednesday.
Stocks had been hammered early in the week amid rising concerns about the economy. The Federal Reserve compounded those worries Tuesday by raising its key short-term interest rate for the 11th time since June 2004, to 3.75%.
There were new signs Thursday of the damage Katrina has done to the economy. The Labor Department reported that the number of people seeking jobless benefits jumped to a two-year high last week.
Meanwhile, the Conference Board said its index of leading economic indicators fell for the second straight month during August as consumer sentiment weakened.
The data for the index were collected before Katrina’s devastation of the Gulf Coast, and it is likely that the September reading for the index will be even weaker, analysts said.
Blue-chip stocks may feel a chill today from Alcoa, which warned after the close of trading that its third-quarter earnings would be as much as 39% below Wall Street estimates. Alcoa, which dropped 18 cents to $25.90 during regular trading, sank to $24.65 in the after-hours market.
In other market highlights:
* Shares of oil- and gas-related companies reversed earlier gains. The S&P; oil & gas exploration and production index lost 0.8%. Chevron fell 50 cents to $63.77, ConocoPhillips slid 67 cents to $69.76 and Occidental Petroleum dropped 92 cents to $87.46.
* McDonald’s rose $1.67 to $33.09 after the fast-food giant said higher gasoline prices were having a limited effect on its business. The company Wednesday raised the cash dividend on its stock by 22%.
* An index of retailing shares rallied 2.7% and contributed the most to the S&P; 500’s gain among 24 industry groups. Wal-Mart added 70 cents to $43.19. The stock hit a six-year low this week. Lowe’s, the No. 2 U.S. home-improvement retailer, gained $2.87 to $65.30.
* Bed Bath & Beyond rose $2.28, or 6.1%, to $39.70 for the best performance in the S&P; 500. The No. 1 U.S. home-furnishings retailer had earnings of 47 cents a share in the second quarter ended Aug. 27, 1 cent more than analysts estimated in a Thomson Financial survey.
* Shares of Caterpillar and other companies that might benefit from construction and repairs in the wake of Rita climbed. Caterpillar gained 89 cents to $58 and was the second-biggest contributor to the Dow’s gain.
Louisiana-Pacific, which makes home-building materials, advanced $1.13 to $27.52; engineering firm Shaw Group jumped $2.86 to $24.86.
* Shares of home builders rebounded from a recent drubbing after KB Home reported higher quarterly earnings. KB Home jumped $2.98 to $73.70, Lennar rose $3.70 to $57.19 and Toll Bros. was up $1.33 to $43.35.
* Sprint Nextel, the No. 3 U.S. wireless carrier, rallied 76 cents to $24.31. The company raised the value of expected benefits from its recent merger by 20% to $14.5 billion and said it would invest the savings in its mobile phone network.
* Food giant General Mills gained $1.51 to $46.19 after its quarterly earnings rose 38%, well ahead of analysts’ predictions.
* Gold pulled back from 17-year highs, with near-term futures off $2.30 to $466.60 an ounce in New York. Among mining stocks, Barrick Gold lost 32 cents to $28.73 and Goldcorp fell 45 cents to $19.95.