Sun, Dec 05, 2004 - Page 10 News List

Wall Street builds on last month's gains

AFP , NEW YORK

Specialist Tom Greenhill, second from right, trades Hewlett-Packard shares on the floor of the New York Stock Exchange on Friday. Stocks rose as investors welcomed a third day of falling oil prices and a strong reveune forecast from Dow component Intel Corp.

PHOTO: AP

Despite a murky economic outlook, Wall Street has been able to look on the bright side and keep its upward momentum over the past week, building on solid gains for last month.

The benchmark Dow Jones Industrial Average rose 0.67 percent for the week to end Friday at 10,592.21 and the broad-market Standard and Poor's 500 advanced 0.72 percent to 1,191.17.

The tech-heavy NASDAQ composite meanwhile surged 2.19 percent for the week to 2,147.96.

The Dow blue-chip index closed out last month with a 4 percent gain, with the NASDAQ up 6.2 percent and the Standard and Poor's 500 up 3.9 percent. And the market kept on an upward trend in early December, which is typically a strong month.

The market has had a mix of good and bad news, but traders have been more fixed on the positive developments.

Thus, a 13 percent plunge in crude oil prices over the past week offset concerns about a sagging US dollar, and traders were able to overlook sluggish retail sales and a weaker-than-expected report on the US labor market, which created a disappointing total of 112,000 jobs last month.

Barry Hyman, an equity market strategist at Ehrenkrantz King Nussbaum, said a major positive for Wall Street it that the bubble appears to have come out of the oil market.

"The run-up in oil has been broken and you're probably looking at oil heading down to US$40 to US$42 a barrel in the near term," he said.

The drop in oil and recent upbeat economic news comes at a time when the stock market is typically the strongest, and analysts say momentum now appears good.

"The market appears to be breaking out from the brief consolidation of the past two weeks, and the rally that likely lies ahead could be of similar proportions to the October-November run," said Bob Dickey at RBC Dain Rauscher.

"We believe a good rally period lies ahead, but you must be present to win. As usual, the market will not be waiting on indecision."

Although many traders are looking for a year-end "Santa Claus rally," there are others who are guarded.

"People are having second thoughts about what these job figures mean," said Michael Metz, chief investment strategist at Oppenheimer and Co. "They raise questions about how self-sustaining the economy is."

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