Wall St ends flat as energy gains offset sentiment
Reuters
First Posted 04:57:00 05/17/2008
NEW YORK—US stocks finished little changed on Friday as surging oil prices lifted energy shares and offset data that showed consumer confidence sank to its lowest in 28 years.
Exxon Mobil Corp. and Chevron Corp. rose more than one percent each, supporting the Dow and S&P 500. Oil prices in New York closed at a record high above $126 on a weakening dollar and a Goldman Sachs forecast that crude would reach $141 per barrel. Earlier, US oil futures hit an intraday record near $128.
The lofty level of oil prices helped drive down other sectors, however. An S&P index of retail shares was down 1.1 percent.
US consumer confidence tumbled this month, according to the Reuters/University of Michigan Surveys of Consumers, as short-term inflation expectations hit their highest since the stagflation era of the early 1980s.
The consumer accounts for "around two-thirds to 75 percent of the US economy. So I think when you look at energy prices and housing prices weakening in key areas, these are all aspects keeping the consumer weak, and sentiment numbers are reflecting that," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.
For the week, stocks rose, however, and the S&P had its best weekly percentage gain in about a month, with data showing a modest rise in consumer prices in April contributing to the week's upbeat news.
The Dow Jones industrial average slipped 5.86 points, or 0.05 percent, to end at 12,986.80. But the Standard & Poor's 500 Index inched up 1.78 points, or 0.13 percent, to 1,425.35. The Nasdaq Composite Index dropped 4.88 points, or 0.19 percent, to 2,528.85.
For the week, the Dow was up 1.9 percent, the S&P was up 2.7 percent and the Nasdaq was up 3.4 percent.
Trading volume continued to be on the light side on the New York Stock Exchange, with about 1.32 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion. NYSE trading volume hit its low for the year on Monday, when 1.05 billion shares traded hands.
Financial shares sagged after Merrill Lynch downgraded two large regional US banks, KeyCorp and Regions Financial Corp., citing a bleak outlook for such banks. An S&P index of financial shares fell 1.4 percent.
June crude rose by $2.17 to settle at $126.29 per barrel and hit an intraday record of $127.82.
Chevron Corp. gained 1.9 percent to $100.38 and Exxon Mobil rose 1.5 percent to $92.67.
A surprising increase in US housing starts gave the market some reason for optimism early in the session.
Housing starts rose by a surprisingly strong 8.2 percent in April and building permit applications turned up for the first time in five months, the Department of Commerce said. But all of the increase was due to a huge rebound in the multifamily sector, which had a sharp decline in March. The single-family sector actually declined.
Stronger-than-expected earnings from retailers Nordstrom, up 3.1 percent at $38.44, and Abercrombie & Fitch, up 0.1 percent at $76.19, also helped.
On the Nasdaq, about 2.29 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones on the NYSE by eight to seven, while decliners beat advancers on the Nasdaq by about four to three.
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