Stocks advanced Wednesday on a durable goods report that surprised Wall Street. The Commerce Department announced that July?s durable goods rose 1.3%, while analysts were expecting no increase from June, which also showed a move up of 1.3%. Growth in durable goods, which include big ticket items like cars, appliances and machinery, bodes well for the economy as it is a good indicator of stronger consumer confidence.
The Dow Jones industrial average jumped 89.64 points, or 0.79%, on Wednesday. The blue chip index closed at 11,502.51. The Standard & Poor's 500 index climbed 10.15 points, or 0.80%, ending the session at 1,281.66. The Nasdaq picked up 20.49 points, or 0.87%, closing at 2,382.46.
This week continues to see thin trading as often is the case during the week that leads up to the Labor Day weekend.
Oil prices staged an advance for the third straight day as the market becomes more concerned over Hurricane Gustav hitting the Gulf of Mexico and disrupting oil and natural gas production in the area. Light, sweet crude ascended $1.88, settling at $118.15 per barrel on the New York Mercantile Exchange.
Royal Dutch Shell PLC stated that it is evacuating about 300 workers from the region, and BP PLC said it is also releasing employees from there.
Natural gas also reacted to Gustav news with a gain in price. It was up 11.6 cents to settle at $8.394 per million British thermal units.
In other news it was reported that Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department as a result of recent bank failures.
"I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses," Chairman Sheila Bair said in an interview.
The FDIC has not borrowed money from the Treasury since the savings-and-loan debacle of the early 1990s.
The Focus List
Focus List holdings on average gained 0.69% for the day.
Flowserve Corp. (FLS) was Wednesday biggest gainer, turning in an advance of 4.22% with no major news to report.
Unfortunately, Central European Distribution Corp. (CEDC) slipped again today by 2.82% on no developments. We continue to be puzzled by its recent decreases especially since the conflict between Russia and Georgia has simmered down.
We are still watching this one closely, looking for a rebound as this is a company that offers strong fundamentals. Its earnings per share missed consensus estimates only once during the past 5 consecutive quarters. With the one earnings disappointment factored in, CEDC still averaged a 7% forecasts beat over the 5 quarters. Wall Street has full-year earnings expectations pegged at $2.88 per share, up from last month?s $2.70.
