US stocks end higher as hurricane downgraded
Wall Street rallied to finish mostly higher today, capping off the week with two days of gains as Hurricane Rita lost steam and raised hopes that its impact on key Gulf Coast refineries wouldn’t be as bad as initially feared.
With Rita headed for the Texas coastline – the heart of US oil production - investors had braced for a repeat of the devastation caused by Hurricane Katrina last month. By this afternoon, however, Rita weakened two notches to a Category 3 hurricane, sending oil prices down more than 2 dollars and easing the mood on Wall Street.
But trading volume remained light while traders kept an eye on the storm, projected to strke the Texas-Louisiana border by early tomorrow morning. And despite a drop in energy prices, the Dow Jones industrial average posted a small loss Friday.
“I think whenever you have something that’s an event that could create news over the weekend, people get a little more cautious about putting money on the table,” said Susan Malley, chief investment officer for Malley Associates Capital Management.
The Dow dropped 2.46, or 0.02%, to 10,419.59, after sliding as much as 49.75 in early activity.
The broader stock indicators moved higher. The Standard & Poor’s 500 index rose 0.67, or 0.06%, to 1,215.29, and the Nasdaq gained 6.06, or 0.29%, to 2,116.84.
Bonds finished lower, with the yield on the 10-year Treasury note rising to 4.25% from 4.18% yesterday. The US dollar was mixed against other major currencies in European trading, while gold prices pulled back 17-year highs reached earlier this week.
Today’s recovery rounded off an uneasy week on Wall Street as Rita swelled into a massive Category 5 hurricane on Wednesday and threatened the remaining Gulf Coast oil facilities mostly untouched by Katrina in late August.
Stocks plunged earlier in the week, hammered by concerns about an economic slowdown as oil and gas prices edged near record levels and following the Federal Reserve’s decision to raise the nation’s interest rates an 11th consecutive time. The Dow posted three straight days of hefty losses, giving up more than 250 points through Wednesday.
For the week, the Dow lost 2.09%, the S&P declined 1.83% and the Nasdaq ended 2.01% lower.
Crude oil also surged past 68 dollars a barrel this week amid growing concerns about Rita’s potential to further ravage Gulf Coast oil production. Today, a barrel of light crude sank 2.31 dollars to settle at 64.91 dollars on the New York Mercantile Exchange, where petrol futures also dropped 5.4 cents to 2.086 dollars a gallon.
Declining issues outpaced advancers for most of the session, but the market shifted and had advancers leading decliners by 17 to 16 on the New York Stock Exchange. NYSE volume of 1.52 billion shares fell short of the 1.86 billion shares traded Thursday.
The Russell 2000 index of smaller companies gained 4.3, or 0.66%, to 655.46, after opening the session in negative territory.
