Stocks Erratic After Attack, Factory Data
Friday Feb 24 2006 10:19:00 EST
NEW YORK, Feb 24, 2006 (AP Online via COMTEX) --
Stocks were mixed in an erratic session Friday as investors grappled with the implications of a terror attack against a Saudi Arabian oil processing plant and a surprising decrease in factory orders.
Before the market opened, news reports said two explosives-laden cars attempted to destroy a plant in Buqayq. Although officials said the flow of oil was not halted, the news sent oil prices higher, with a barrel of light crude quoted at $62.85, up $2.31, on the New York Mercantile Exchange.
The bombing weighed on stock investors already concerned about a sharp drop in big-ticket factory orders. The Commerce Department said durable goods orders fell 10.2 percent in January, the biggest drop in 5 1-2 years and far greater than the 0.2 percent drop economists expected.
With energy prices rising and the economy slowing, investors' fears of greater inflation, and the Federal Reserve's rate hikes to combat it, were reignited. Yet despite the news, analysts were pleased that the day's selling was moderate.
"One of the most important signs of a bull market is when the bull market manages very, very bad news like we've had today," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "So in that sense, you've got a very encouraging performance today."
In early afternoon trading, the Dow Jones industrial average fell 11.37, or 0.1 percent, to 11,057.85.
Broader stock indicators were modestly higher. The Standard & Poor's 500 index added 2.71, or 0.21 percent, to 1,290.50, while the Nasdaq composite index gained 6.21, or 0.27 percent, to 2,285.53.
Bonds edged lower, with the yield on the 10-year Treasury note rising to 4.57 percent from 4.56 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.
Technology shares came under scrutiny after Dow component Intel Corp. was downgraded to "market perform" from "outperform" by Friedman Billings Ramsey and its price target was lowered to $23 per share from $31 per share. The analyst blamed lower demand and increased competition for the downgrade. Intel nonetheless rose 14 cents to $20.43.
In merger news, British utility National Grid PLC rose $1.51 to $53.56 after it confirmed it was in discussions to purchase U.S. natural gas and electric utility KeySpan Corp. for up to $7.3 billion in cash. KeySpan gained 33 cents to $41.42.
Gap Inc. was among the notable companies that reported earnings late Thursday. The clothing retailer said its fourth-quarter profits slumped slightly, though they still met Wall Street's forecasts. However, sales growth remains sluggish, and Gap shares dropped 51 cents to $18.59.
Time Warner Inc. slid 18 cents to $17.14 after the company said CNN founder Ted Turner would not seek re-election to the media conglomerate's board. Former U.S. Trade Representative Carla Mills is also stepping down as a director.
Advancing issues barely outnumbered decliners on the New York Stock Exchange, where volume came to 756.08 million shares, compared with 837.2 million traded at the same point on Thursday.
The Russell 2000 index of smaller companies rose 2.45, or 0.33 percent, to 734.90.
Overseas, Japan's Nikkei stock average edged up 0.04 percent. In Europe, Britain's FTSE 100 was up 0.42 percent, France's CAC-40 rose 0.67 percent for the session, and Germany's DAX index gained 0.22 percent in late trading. |
