November 2, 2004 in Business

Stocks edge higher as election looms

Associated Press
 

Wall Street’s pre-election jitters left stocks with only a modestly gain Monday, even as crude oil futures fell near the $50 per barrel mark. A mix of economic data added to the ambivalence.

A sharp drop in energy prices soothed the market, although the prospect of a tight election loomed. A barrel of light crude for December delivery closed at $50.13, down $1.63, on the New York Mercantile Exchange. It was the lowest closing price since Oct. 4, when futures settled at $49.91 per barrel.

“The oil picture certainly helps, but you still have a lot of people sitting on their hands,” said Brian Belski, market strategist at Piper Jaffray. “There’s not a lot of engagement overall, and there won’t be until we see if there’s a decisive winner on Wednesday. If there is, no matter who it is, we’ll probably go higher.”

The Dow Jones industrial average rose 26.92, or 0.3 percent, to 10,054.39. It was the fifth straight session that the Dow posted gains — the first five-day run in positive territory since July 27 to Aug. 2.

Broader stock indicators closed narrowly higher. The Standard & Poor’s 500 index was up 0.31, or 0.03 percent, at 1,130.51, and the Nasdaq composite index gained 4.88, or 0.2 percent, to 1,979.87.

Volume was lighter than usual as some investors sat out of the market prior to Election Day, and the major indexes moved in and out of positive territory in a narrow range for most of the session.

Investors welcomed a 0.6 percent rise in consumer spending, coming after a 0.1 percent drop in August. However, the Commerce Department also noted that personal incomes rose by only 0.1 percent, and that the savings rate fell to 0.2 percent from 0.7 percent.

With spending outstripping income by a wide margin, there were concerns that it’s only a matter of time before consumers have to cut back on their spending — which accounts for two-thirds of the nation’s economic activity.

Also weighing on investors, the Institute for Supply Management’s manufacturing index fell in October, coming in at 56.8, far lower than the 58.5 reading expected by Wall Street. The index was at 58.5 in September.

Advancing issues edged decliners by nearly 4 to 3 on the New York Stock Exchange, where volume was light.

The Russell 2000 index of smaller companies was up 3.21, or 0.6 percent, at 587.00.

Overseas, Japan’s Nikkei stock average fell 0.34 percent. In Europe, Britain’s FTSE 100 closed up 1.07 percent, France’s CAC-40 rose 0.74 percent for the session, and Germany’s DAX index gained 1.32 percent.

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