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News >  Business

Stocks rally as hurricane fears lessen

Associated Press

Wall Street rallied to finish mostly higher Friday, capping off the week with two days of gains as Hurricane Rita lost strength and raised hopes that its impact on key Gulf Coast refineries wouldn’t be as bad as initially feared.

With Rita headed for the Texas coastline — the heart of U.S. oil production — investors had braced for a repeat of the devastation caused by Hurricane Katrina last month. By Friday afternoon, however, Rita weakened two notches to a Category 3 hurricane, sending oil prices down more than $2 and easing the mood on Wall Street.

But trading volume remained light while traders kept an eye on the storm, projected to strike the Texas-Louisiana border early Saturday morning. And despite a drop in energy prices, the Dow Jones industrial average posted a small loss Friday.

“I think whenever you have something that’s an event that could create news over the weekend, people get a little more cautious about putting money on the table,” said Susan Malley, chief investment officer for Malley Associates Capital Management.

The market also mulled a profit warning from Alcoa Inc. and a pair of discouraging earnings reports from technology firms Oracle Corp. and Palm Inc., an early glimpse of the upcoming third-quarter earnings season.

At the close of trading, the Dow dropped 2.46, or 0.02 percent, to 10,419.59, after sliding as much as 49.75 in early activity.

The broader stock indicators moved higher. The Standard & Poor’s 500 index rose 0.67, or 0.06 percent, to 1,215.29, and the Nasdaq gained 6.06, or 0.29 percent, to 2,116.84.

Bonds finished lower, with the yield on the 10-year Treasury note rising to 4.25 percent from 4.18 percent Thursday. The U.S. dollar was mixed against other major currencies in European trading, while gold prices pulled back 17-year highs reached earlier this week.

Friday’s recovery rounded off an uneasy week on Wall Street as Rita swelled into a massive Category 5 hurricane Wednesday and threatened the remaining Gulf Coast oil facilities mostly untouched by Katrina in late August.

Declining issues outpaced advancers for most of the session, but the market shifted and had advancers leading decliners by 17 to 16 on the New York Stock Exchange. NYSE preliminary consolidated volume of 2.01 billion shares fell short of the 2.42 billion shares traded Thursday.

The Russell 2000 index of smaller companies gained 4.3, or 0.66 percent, to 655.46, after opening the session in negative territory.

Overseas, Britain’s FTSE 100 rose 0.52 percent, Germany’s DAX index added 0.69 percent, and France’s CAC-40 was higher by 0.65 percent. Japan’s stock markets were closed for a national holiday.

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