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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (73657)	7/28/2006 2:11:00 PM
From: Hope Praytochange	Respond to of 173976

Stocks Rally on Slowdown in 2Q GDP By THE ASSOCIATED PRESS Filed at 1:48 p.m. ET NEW YORK (AP) -- Evidence of a moderating economy helped stocks rally Friday as a sharp slowdown in second-quarter gross domestic product growth fed hopes for an end to rising interest rates. The Dow Jones industrials climbed 122 points. Investors bid shares higher after the Commerce Department said GDP growth tailed off by more than half to a 2.5 percent annual rate. Although the weaker-than-forecast reading drove concerns that the economy could be headed for a downturn, it reinforced beliefs that the Federal Reserve may not need to hike interest rates further. Wall Street's optimism overshadowed signs of soaring inflation and lower consumer confidence. Core consumer prices -- excluding energy and food -- surged 2.9 percent last quarter, while employment costs rose a stronger-than-expected 0.9 percent. While investors have been spooked by any hint of rising prices, they likely set aside the GDP's inflation component because recent reports have shown a more benign trend, said Jeff Kleintop, chief investment strategist for PNC Financial Services Group. But he was uncertain if the market would maintain its advance. ''I wouldn't be surprised if we get a late-day selloff as we head into the weekend,'' Kleintop said, citing the market's recent trend of extreme volatility amid jitters about interest rates and geopolitical issues. In early afternoon trading, the Dow gained 122.79, or 1.11 percent, to 11,223.22. The Dow had closed little changed since soaring 230 points on Monday and Tuesday. Broader stock indicators also advanced. The Standard & Poor's 500 index was up 14.32, or 1.13 percent, at 1,277.52, and the Nasdaq composite index climbed 32.81, or 1.6 percent, to 2,087.28. Advancing issues outpaced decliners by more than 4 to 1 on the New York Stock Exchange. The economic data lifted bonds, with the yield on the 10-year Treasury note sliding to 5 percent from 5.04 percent late Thursday. The dollar extended its losses to the yen; gold prices slipped below $645 an ounce. Oil prices plunged as energy traders took profits from recent gains on worries about political tension in the Middle East and Nigeria. A barrel of light crude lost $1.39 to $73.15 on the New York Mercantile Exchange. Investors moved cautiously this week ahead of Friday's economic news, and analysts say listless trading should continue until the Fed's Aug. 8 meeting on interest rates. With oil lingering at persistently high levels, investors have been nervous about the Fed's ability to set rates where they will curb inflation but preserve economic growth. GDP growth was expected to slow from a brisk 5.6 percent annual rate in the first quarter, but the number came in below economists' forecast of 3 percent. Although the Commerce Department's employment cost index topped estimates for an 0.8 percent increase, Kleintop said investors perhaps were more focused on the longer-term downward trend in the amount companies were paying for employee benefits. The University of Michigan's consumer sentiment index for July lost 0.2 points to 84.7. However, the report also showed Americans were increasingly upbeat about the economic outlook despite high gasoline prices and lending costs. Wal-Mart Stores Inc. gained on news that the discount retailer plans to sell its 85 stores in Germany to Metro AG. Wal-Mart rose 75 cents to $44.28. Chevron Corp. posted its best-ever quarterly profit, which rose 18 percent but fell short of Wall Street estimates. Its earnings capped a round of stellar results from oil companies. Chevron lost $1.88 to $65.85. Oil services company Baker Hughes Inc. also saw its earnings skyrocket from the sale of its stake in WesternGeco. Baker Hughes nonetheless fell $4.24 to $76.61. Overseas, Japan's Nikkei stock average added 1.07 percent. Britain's FTSE 100 rose 0.77 percent, Germany's DAX index gained 0.82 percent and France's CAC-40 was higher by 0.55 percent. On the NYSE, volume of 926.9 million shares trailed the 970.3 million shares changing hands at the same point Thursday. The Russell 2000 index of smaller companies rose 12.40, or 1.81 percent, to 698.09. ^------ On the Net: New York Stock Exchange: nyse.com Nasdaq Stock Market: nasdaq.com