Stocks lower amid hurricane woes
Wall Street finished a difficult week lower Friday as investors, restrained by uncertainty about the economic impact of Hurricane Katrina, had little reaction to a sharp decline in oil prices and less unemployment.
The market fluctuated in Friday’s session on news that unemployment reached a four-year low, and as energy prices retreated on signs that allied nations will help cushion a U.S. oil shortage. The numbers, however, were shadowed by fears that Katrina’s devastation of the Gulf coast could trigger a sharp economic downturn.
“I consider this event as critical, if not more economically damaging, as Sept. 11, 2001,” said Paul McManus, senior vice president at Independence Investment LLC. “We have no idea what the extent of the damage is down there, and we may not know until next week.”
Wall Street felt some relief from a drop in oil prices, which fell after the government and members of the Paris-based International Energy Agency said they would tap reserves to counter disruptions to 90 percent of oil production in the Gulf of Mexico. Gasoline futures also eased for the first time this week.
A barrel of light crude sank $1.90 to settle at $67.57 on the New York Mercantile Exchange, where gasoline futures dropped 22.5 cents to $2.18 per gallon.
The Dow Jones industrial average fell 12.26, or 0.12 percent, to 10,447.37.
The broader stock indicators also were lower. The Standard & Poor’s 500 index slipped 3.57, or 0.29 percent, to 1,218.02, and the Nasdaq composite index closed down 6.83, or 0.32 percent, at 2,141.07.
Bonds edged higher, with the yield on the 10-year Treasury note slipping to 4.02 percent from 4.03 percent on Thursday. The U.S. dollar was mixed against other major currencies in European trading, while gold prices pulled back slightly.
Investors largely ignored a report from the Labor Department showing that the 169,000 jobs created in August were fewer than the 190,000 predicted by economists, even as the job growth pushed unemployment down to a low of 4.9 percent from 5 percent the month before.
But interpreting the data — coupled with several lackluster reports earlier this week — was complicated by the worsening situation in Katrina’s wake. Many fear the aftermath of the storm will exacerbate a slowdown already happening in the economy and persuade the Federal Reserve to halt its string of interest-rate hikes.
Declining issues outpaced advancers by 9 to 7 on the New York Stock Exchange, where volume of 1.27 billion shares was well below the 1.71 billion shares traded Thursday.
The Russell 2000 index of smaller companies fell 5.12, or 0.77 percent, to 663.33.
Overseas, Japan’s Nikkei stock average rose 0.74 percent. Britain’s FTSE 100 dropped 0.03 percent, Germany’s DAX index fell 0.11 percent, and France’s CAC-40 was lower by 0.43 percent.