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Stocks Finish Higher

Stocks rallied into the close Wednesday, finishing higher as oil prices sell. The lack of selling interest tied to Hurricane Katrina attracted buyers to move in late in the day, says Standard & Poor's MarketScope. The second-quarter U.S. GDP report came in weaker than expected. Insurance and retail stock groups were weaker, while construction groups and others that could benefit from the effort to repair hurricane damage were higher.

The Dow Jones industrial average went up 12.33 points, or 0.12%, to 10,425.15. The broader Standard & Poor's 500 index rose 3.12 points, or 0.26%, to 1,211.98. The tech-heavy Nasdaq composite rose 7.77 points, or 0.36%, to 2,137.53.

Crude oil prices moved lower after the Energy Department's announcement that it would tap into the strategic petroleum reserve to help offset oil and gas prices. The price of October futures settled down 84 cents to $68.97 a barrel.

The U.S. gross domestic product for the second quarter was revised slightly lower to 3.3%, from 3.4% in the advanced report. Consumer spending was also revised downward, to a 3.0% gain from 3.3%, as was business fixed investment, to 8.9% from 9.3%. Inventory growth was lower than expected, and the chain price index was not revised.

The August Chicago purchasing manager's survey arrived at a number well below expectations. The Chicago PMI was down to 49.5, short of 63.5 in July, and short of expectations that it would slip to 61.5.

In economic news later this week, Thursday brings the release of personal income figures for July and the ISM manufacturing index for August. The employment report for August is due out Friday.

In corporate news, ATP Oil & Gas (ATPG) announced that Hurricane Katrina caused a significant reduction in daily net production of natural gas by roughly 30 million to 35 million cubic feet.

Union officials are urging members at Boeing (BA) to strike after the company submitted its final contract to machinists. The members will vote on the offer tomorrow.

In earnings news, jeweler Tiffany & Co. (TIF) reported earnings of 35 cents per share in the second quarter, vs. 22 cents per share during the same period last year, on an 8% rise in same-store sales. The company also raised its guidance for the 2006 fiscal year.

Treasury Market

Treasury prices headed higher as traders looked for a safety bid in the wake of Hurricane Katrina, and following the release of the weak GDP data. A comment from Philadelphia Federal Reserve Board President Anthony Santomero that Hurricane Katrina would "slow, not stall" the economy sent yields up in the middle of the session, but the high gas prices won out in the end, pushing yields back down. The yield on the benchmark 10-year note finished lower at 4.01%.

World Markets

European stock markets finished higher Wednesday. London's Financial Times-Stock Exchange 100 index was up 41.10 points, or 0.78%, to 5,296.90.

Germany's DAX index rose 37.97 points, or 0.79%, to 4,829.69.

In Paris, the CAC 40 index gained 42.70 points, or 0.98%, moving to 4,399.36.

Asian markets finished lower on Wednesday. Japan's Nikkei 225 index fell 39.54 points, or 0.32%, to 12,413.60.

In Hong Kong, the Hang Seng index dropped 18.67 points, or 0.13%, to 14,903.55.

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