Wall Street Closes Week With Losses Despite Friday Gains
July 7, 2008 - 8:22 PM
(CNSNews.com) - Strong retail sales figures and encouraging comments from the chairman of the Federal Reserve regarding the impact of oil prices on the economy boosted the markets on Friday, but it wasn't enough to prevent all three major indexes from losing ground for the week.
The Dow Jones industrial average gained 38.93 points to reach 9,933.98, down 121.82 points over the past five days. The Nasdaq Composite index advanced 8.48 points to 1,911.50, off 8.47 points since last Friday, and the Standard & Poor's 500 index climbed 4.91 points to 1,108.20, down 13.94 points for the week.
Investors who had been waiting for good economic news finally got it on Friday, when the Commerce Department reported that retail sales leaped 1.5 percent in September, much more than the 0.6 percent increase forecast by economists.
In addition, the Labor Department said that wholesale prices, as measured by the Producer Price Index, rose only 0.1 percent in September. While this was up from the 0.1 percent decline in August, the increase was small enough to assure traders that inflation will not be a problem anytime soon.
The final ingredient in Friday's rally came in the form of reassuring words from Federal Reserve Chairman Alan Greenspan, who said surging energy costs will have less of an impact on the economy than they did during the energy crisis of the 1970s. This comment joined a slight drop in crude oil prices to calm investors' worries ... at least for the day.
However, not everyone shared Greenspan's optimism on oil costs and the economy.
"It's nice to see a bit of a rebound today, but it's not convincing in any manner," Michael Palazzi, managing director of equity trading at SG Cowen Securities, told the Associated Press. "We're not going anywhere meaningful until the price of oil comes down. It's basically choking us."
Overseas trading ended the week on a mostly negative note. Japan's Nikkei stock average, Britain's FTSE 100 and Germany's DAX index all lost ground, though France's CAC-40 was able to realize slight gains in Friday's session.
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