WALL STREET Oil prices dominate trading
The trade deficit is up, and consumer confidence is down.
NEW YORK (AP) -- Wall Street closed out a difficult week with a small gain Friday, even as many investors, concerned over yet another spike in oil prices and a drop in consumer confidence, stayed on the sidelines.
The major indexes ended the week mixed, with tech stocks pummeled by disappointing earnings outlooks.
Oil prices closed at $46.58, up $1.08, on the New York Mercantile Exchange, reaching another record high and giving greater credence to investor fears that oil may have to reach $50 or beyond before falling back.
Wall Street was also worried about the economy. The University of Michigan reported that overall consumer confidence levels softened unexpectedly in mid-August amid a big drop in consumers' views on the economic outlook.
News that the trade deficit ballooned 19.1 percent from May to June also helped undermine the market's gains.
"There's still a lot of uncertainty in the market right now, and coming in during such a traditionally slow month, there's just not a lot going on," said Michael Murphy, head trader with Wachovia Securities in Baltimore. Valuations are appealing in a lot of sectors, but with the conventions coming up and oil dominating everything, big investors are just sitting on their hands."
The Dow Jones industrial average gained 10.76, or 0.1 percent, to 9,825.35.
Despite Thursday's massive selloff, the major indexes were mixed for the week. The Dow and the S & amp;P 500 both edged 0.1 percent higher, but the Nasdaq fell 1.1 percent.
Friday's trading was dominated by the same issue that sent stocks gyrating throughout the week: oil prices. As oil futures kept climbing on world markets, Wall Street grew increasingly uneasy about the possibility of accelerating inflation, especially when economic growth seems uncertain.
Moreover, with oil prices rising, fewer jobs being created and stocks tumbling, consumer confidence is waning. The University of Michigan's consumer confidence index had a preliminary reading of 94 in August, down from the 96.7 reading in July, according to Dow Jones Newswires.
With consumer spending a large part of the overall economy, Wall Street was nervous that the lack of confidence could affect corporate profits in the third and fourth quarters.
The Commerce Department said the trade deficit jumped to $55.82 billion in June, up from $46.88 billion in May. In a time when consumer spending is dropping, that left investors concerned that what little Americans were spending was going overseas.
However, the government also reported that wholesale prices rose just 0.1 percent in July, with lower food prices offsetting higher fuel prices.
Tech stocks received a small boost from Dell, whose sunny outlook for 2004 was a welcome relief from the disappointing outlooks from Hewlett-Packard Co. and Cisco Systems Inc. earlier in the week. Analysts, however, maintain that technology shares, semiconductors in particular, remain oversold.