Stocks finished modestly higher on Monday, after an early-day relief rally fizzled as higher oil prices and rising treasury yields heightened inflation concerns.
On Monday, the Dow Jones industrial average rose 24.04 points, or 0.23%, to 10,443.63. The broader Standard & Poor's 500 index was up 0.34 points, or 0.03%, to 1,215.63. The tech-heavy Nasdaq composite index rose 4.62 points, or 0.22%, to 2,121.46.
November NYMEX crude recovered from early losses, settling up $1.63 a barrel at $65.82. Front-month gasoline futures closed up at $2.13, more than 18 cents higherthan overnight lows. "The jury is still out as to how quickly Texas refineries can get back on line in the aftermath of hurricane Rita" says Action Economics. At this point, 100% of Gulf crude and 78% of natural gas refining remains shut-in.
In economic news, August existing home sales rose 2% in August to a 7.29 million rate, from a revised 7.15 million in July (7.16 million previously). "While the jump is much stronger than the small decline we expected, the increase was the risk we noted in the wake of Katrina," says Action Economics.
Insurance sector stocks were bolstered by the apparent lower damage figures from Rita, reports Action Economics.
Among stocks to watch, Palm (PALM ), Microsoft (MSFT ), and Verizon (VZ ) will hold a press conference today. Standard & Poor's analyst Megan Graham-Hackett believes Palm is going to announce a new Treo smartphone based on Microsoft's operating system, and using Verizon's high-speed wireless service.
Wal-Mart Stores (WMT ) has emerged as a new player in the race for Tommy Hilfiger (TOM ). Sources said Wal-Mart is believed to have initiated the idea and soon will start its due diligence analysis on Tommy, according to WWD.com.
Chico's FAS (CHS ) says September same-store sales are in mid-double digit percent range, with Chico's brand same-store sales in high single to low double-digit percent range.
Walgreen (WAG ) posted 32 cents, the same as a year earlier, fourth-quarter EPS on 11% higher sales. The drugstore notes fourth-quarter EPS was flat due in part to $54.7 million pre-tax charge for expenses associated with Hurricane Katrina.
Boeing (BA ) confirms it has reached a tentative agreement for a new three-year contract with International Association of Machinists and Aerospace Workers, which represents about 19,000 Boeing employees.
Long-dated Treasuries finished lower, with the 10-year note yielding 4.29%, after a surprisingly strong existing home sales figure, and the early-day rally in the stock market.
European stock markets finished higher on Monday as Hurricane Rita caused less damage than expected in U.S., and energy prices fell.
London's Financial Times-Stock Exchange 100 index closed up 39.50 points, or 0.73%, at 5,453.10. There was an appetite for risk returns, with UK financials very well bid today. Also, miners rose thanks to renewed confidence in the Chinese economy and high commodity prices. Local M&A newsflow also spiced up the FTSE, although O2 turned negative on profit-taking after early jump on the back of a report in The Business that Deutsche Telekom is plotting a £18 billion takeover, says Standard & Poor's MarketScope.
Germany's DAX index gained 115.58 points to 4,998.16. In Paris, the CAC 40 index rose 89.72 points to 4,566.92 as oil prices fell.
Asian markets finished higher on Monday. In Japan, the Nikkei 225 index jumped 233.27 points, 1.77%, to 13,392.63. The market was boosted by a rise in the government's third-quarter corporate sentiment survey and early signs that Hurricane Rita will not hurt the U.S. economy as much as had been feared. A pullback in energy prices, as Rita's impact on Gulf of Mexico oil facilities was not so devastating, contributed to positive sentiment.
Hong Kong's Hang Seng index rose 130.34 points, or 0.86%, to 15,274.31 on back of some relief that Hurricane Rita was less severe than feared, and buying related to the expiration of the September Hang Seng futures contract later this week, says Standard & Poor's MarketScope.