Stocks Finish Higher

The major indexes rebounded after Rita was downgraded to a category four hurricane

Stocks rebounded from early weakness Thursday after Hurricane Rita was downgraded to a category four storm.

The Dow Jones industrial average rose 44.02 points, or 0.42%, to 10,422.05. The broader Standard & Poor's 500 index was up 4.42 points, or 0.37%, to 1,214.62. The tech-heavy Nasdaq composite index added 4.14 points, or 0.2%, to 2,110.78.

November West Texas Intermediate crude oil prices fell 30 cents to $66.50 a barrel, after Hurricane Rita seemed to lose some strength in the Gulf of Mexico. Still, traders worried about another disruption to supply and damage to Texas refineries.

"The hurricane's impact on Gulf oil and gas and refining infrastructure could still be immense, so looking ahead to Friday, the downside for crude and products in particular could be limited," says Action Economics.

There are no major economic reports coming Friday. Action Economics predicts the focus will remain on Rita, and attention will turn toward next week's Fedspeak for insights on the one-two punch from Katrina and Rita. Greenspan speaks on the economy on Tuesday.

In economic news Thursday, weekly jobless claims rose by 8,000 to 432,000 in the week ending Sept. 17, further boosting the 4-week moving average to 376,000 from 347,000. Of those jobles claims, 103,000 were a result of Hurricane Katrina.

The August leading indicators index declined 0.2%, following a 0.1% July decline. Consumer expectations explain much of the weakness, followed by the pace of deliveries and building permits, says Standard & Poor's. In corporate news, KB Home (KBH ) says revenues rose 44% in the third-quarter, and earnings increased to $2.55 a share, from $1.42 a share during the same period a year ago. The company also raised its 2005 guidance to $9.30 from $9.00.

General Mills (GIM ) posted earnings of 64 cents in its first quarter, vs. 45 cents a year ago, on a 3% rise in sales. The company said it still expects low single-digit net sales growth, and a mid single-digit growth in operating profit for 2006.

Engineered Support Systems (EASI ) shares jumped after the company agreed to be acquired by defense contractor DRS Technologies (DRS ) for $43 cash and stock per share.

Treasury Market

Treasury prices were mixed, as the market continues to track Hurricane Rita and her impact on oil prices, says Action Economics. "The whippy conditions have sidelined many," says Action Economics. The yield on the benchmark 10-year note was slightly lower, at 4.17%.

World Markets

European stock markets finished mixed on Thursday. London's Financial Times-Stock Exchange 100 index was up 16 points, or 0.3%, to 5,385.7.

Germany's DAX index fell 26.21 points, or 0.54%, to 4,849.01 following weaker than expected report showing Eurozone July industrial orders declined 1.6% after rising 3.1% in June.

In Paris, the CAC 40 index lost 19.91 points, or 0.45%, to 4,448.15.

Asian markets finished lower Thursday. In Tokyo, the Nikkei 225 index fell 37.21 points, or 0.28%, to 13,159.36 due to losses on the Wall Street overnight. Banks and insurers succumbed to profit-taking following their recent gains.

Hong Kong's Hang Seng index fell 43.67 points, or 0.29%, to 15,179.95. Property shares were under pressure after local banks Hang Seng Bank and Bank of China HK hiked their prime lending rates to 7%, says Standard & Poor's MarketScope.

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