Stocks inch up on oil dip, durable goods

9/24/2004
By MICHAEL J. MARTINEZ
The Associated Press

NEW YORK (AP) — Stocks edged higher Friday as a dip in oil prices and a satisfactory report on durable goods orders cheered investors at the end of a losing week.

Oil prices, which approached record high levels this week, fell modestly on the New York Mercantile Exchange, giving investors hope that crude would retreat further, easing pressure on consumers and businesses. A barrel of light crude was quoted at $48.45, down a penny.

Investors also got a lift from a Commerce Department report on durable goods orders for August. While orders for goods designed to last three or more years fell 0.5 percent for the month, a large falloff in aircraft orders was to blame. Without transportation equipment, durable goods orders actually rose a strong 2.3 percent — a sign that businesses and consumers may have started spending again after a nervous summer.

"Manufacturing seems to be going in the right direction, but the markets continue to yawn," said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers. "And with oil, I think, with the potential to crack $50 per barrel, it doesn't give us a lot of reasons to move substantially higher."

At midday, the Dow Jones industrial average was up 14.53, or 0.1 percent, at 10,053.43.

Broader stock indicators were modestly higher. The Standard & Poor's 500 index gained 2.67, or 0.2 percent, to 1,111.03, and the Nasdaq composite index was up 2.42, or 0.1 percent, at 1,888.85.

Consumers' appetite for large purchases, which help fuel economic growth, remained uncertain after the National Association of Realtors reported a drop in existing home sales in August. The association said 6.54 million homes were sold for the month, less than economists were expecting and down from 6.72 million homes sold in July.

While the durable goods report was a boon to most manufacturers, aircraft manufacturers have been struggling. Boeing Co. chairman Harry Stonecipher told Chinese media that the recovery in the aerospace sector would be far slower than European rival Airbus has claimed. Boeing nonetheless climbed 26 cents to $53.26.

The technology sector was hit by another pair of profit warnings. Netherlands manufacturer Philips Electronics NV lost 11 cents to $23.10 after it warned that that its semiconductor sales in the third quarter would be flat compared to the previous quarter, reducing its previous outlook.

And consumer electronics maker Cirrus Logic Inc. lowered its sales forecast for the current quarter due to slow sales and high customer inventories. Cirrus Logic lost 8 cents to $5.

Shares of mortgage giant Freddie Mac shed 28 cents to $64.10 after the company said it reduced its overall 2003 earnings to reflect a $75 million reserve to be used for legal proceedings. The announcement comes as sister company Fannie Mae was sharply criticized by the government for its accounting practices. Fannie Mae was down $1.85 at $65.30.

Starbucks Corp. rose 42 cents to $45.09 after the coffee retailer said it would purchase up to 9 million shares in a stock buyback program.

Advancing issues outnumbered decliners by about 8 to 5 on the New York Stock Exchange, where volume came to 507.97 million shares, compared with 542.9 million at the same point on Thursday.

The Russell 2000 index of smaller companies was up 2.17, or 0.4 percent, at 567.97.

Overseas, Japan's Nikkei stock average fell 1.1 percent. In afternoon trading, Britain's FTSE 100 was up 0.2 percent, Germany's DAX index gained 0.1 percent, and France's CAC-40 climbed 0.6 percent.

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