Stocks Higher as Oil Eases

Fri Aug 20, 2004
By Michael Flaherty

NEW YORK (Reuters) - U.S. stocks traded slightly higher on Friday, even as oil flirted near the $50-per-barrel mark, suggesting that investors were snatching up beaten-down shares and growing confident that oil prices may be leveling off.

High crude prices boosted shares in oil production companies such as Exxon Mobil Corp. (XOM.N: Quote, Profile, Research) and ChevronTexaco Corp. (CVX.N: Quote, Profile, Research) , which in turn gave a lift to the Dow.

"With the market being so depressed over the past few weeks, I think what you're seeing today is a lot of bottom fishing," said Stephen Carl, principal and head of U.S. Equity Trading, at The Williams Capital Group LP.

The Dow Jones industrial average was up 13.13 points, or 0.13 percent, at 10,053.80. The Standard & Poor's 500 Index was up 2.73 points, or 0.25 percent, at 1,093.96. The technology-laced Nasdaq Composite Index was up 6.74 points, or 0.37 percent, at 1,826.50.

The benchmark indexes were on pace to have their biggest weekly gains in at least three months. In the past week, the S&P 500 has risen 2.67 percent, its biggest gain since the week ended April 2. The Nasdaq has climbed 3.87 percent, while the Dow has gained 2.26 percent in the last week, their its biggest move since the week ended May 28.

Worries that high crude prices will hurt the economy and corporate profits has weighed on the market in recent sessions but some traders said the price of crude is peaking and will soon move lower.

Trading could be choppy on this triple-witching Friday as August individual equity options and some options on stock indexes stop trading at Friday's close.

Typically, options expiration is orderly but some volatility may occur as players unwind those positions against stock and index products.

General Motors Corp. (GM.N: Quote, Profile, Research) weighed on the blue-chip Dow after The Wall Street Journal said some car dealerships are cutting back orders for 2005 models.

Shares of GM fell 54 cents, or 1.3 percent, to $41, making it the biggest burden on the Dow.

Global oil prices raced to fresh highs on Friday, carrying U.S. crude to $49.40 a barrel before easing to $48.95. Oil prices are being driven by escalating violence in Iraq and unabated demand growth from China and India. Crude prices have set records in 15 of the last 16 sessions. Meanwhile, gold futures rocketed to four-month highs on Friday morning, as record high crude oil prices drew investors to the precious metal considered a safe-haven asset, traders said.

December gold (GCZ4: Quote, Profile, Research) was up $6.70 at $416 an ounce at 10:59 a.m. EDT (1459 GMT) on the New York Mercantile Exchange's COMEX division.
Exxon Mobil rose 30 cents, or about 0.67 percent, to $45.39. ChevronTexaco gained $1.35, or 1.5 percent, to $94.45. They were two of the biggest boosts to the S&P 500. Exxon was also one of the top gainers in the Dow.

Chipmaker Marvell Technology Group Ltd. (MRVL.O: Quote, Profile, Research) was a boost to the Nasdaq after it posted a higher quarterly profit, helped by strong growth in enterprise and consumer markets.

Marvell was up $1.48, or 6.8 percent, to $23.20.

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