Wall Street advances as investors take long-term view


Sun, Sep 04, 2005 - Page 10

Wall Street looked past Hurricane Katrina and pushed higher over the past week as investors showed confidence in the US economy's ability to recover from the calamity.

In the week to Friday, the Dow Jones Industrial Average advanced 0.48 percent to 10,447.37 while the Standard and Poor's 500 broad-market index climbed 1.07 percent to 1,218.02. The NASDAQ composite added 0.99 percent for the week to end Friday at 2,141.07.

Coming off seven-week lows in the prior week, the market averted a meltdown despite warnings from some quarters that the devastation from the storm and flooding could have a vast impact on energy and the rest of the economy.

Investors were undaunted in the face of record-high energy costs. Crude oil topped the US$70 level before ending the week at US$67.57 a barrel.

Dick Green at Briefing.com said the market is taking a long-term view, weighing the positive impact from reconstruction and the possibility of a Federal Reserve pause in its rate-hiking cycle.

"The market is apparently looking past the immediate impacts and confident that the Federal Reserve and US government will take strong efforts to ensure the continued growth in the US economy. The obsession with the short-term is understandable from a news standpoint, but the stock market is taking a longer view," he said.

Bonds firmed as the market marked down its growth estimates as well as the expected level of interest rates. The yield on the 10-year US Treasury bond dropped to 4.029 percent from 4.189 percent a week earlier and that on the 30-year bond to slipped to 4.289 percent from 4.381 percent.