Stocks Are Higher Despite Rising Oil Prices

NEW YORK – Stocks edged higher Wednesday despite a lower reading of industrial activity and a spike in oil prices, while technology shares were unaffected by brokerage downgrades of two semiconductor companies.

Investors looked past the August reading of the Institute of Supply Management’s manufacturing index, which fell to 59.0 in August, slightly lower than the 59.8 percent expected on Wall Street.

A slight rise in oil prices – a barrel of crude oil was up 38 cents to $42.50 on the New York Mercantile Exchange – seemed minimal compared to last month’s highs of $49 per barrel, and investors appeared to have put concerns about oil, which had been weighing on stocks all summer, aside for the time being.

Pressure on semiconductor stocks was heightened as Wall Street looked to Intel Corp.’s mid-quarter update Thursday, concerned that a negative outlook would weigh heavily throughout the tech sector. However, a round of analyst downgrades and forecast reductions spurred buying among a few speculators.

In the first hour of trading, the Dow Jones industrial average gained 1.84, or 0.02 percent, to 10,175.76.

Broader stock indicators were higher. The Standard & Poor’s 500 index was up 0.99, or 0.1 percent, at 1,105.23, and the tech-focused Nasdaq composite index gained 9.29, or 0.5 percent, to 1,847.39.

With trading once again light due to the Republican National Convention and the upcoming Labor Day holiday, the market’s moves were exaggerated.

The ISM index fell below 60 for the first time since November, and was down from July’s reading of 62, but the few investors in the market appeared to be taking the news in stride.

Most analysts were predicting a mediocre mid-quarter report from Intel, with First Albany forecasting a third-quarter outlook at the low end of the company’s previous estimates. Nonetheless, Intel climbed 17 cents to $21.46.

Other semiconductor stocks rose as well, despite downgrades that reflected continued weakness throughout the sector. WR Hambrech cut its third-quarter earnings targets for chip equipment maker Teradyne Inc., while Janney Montgomery Scott cut ON Semiconductor Corp. to a “hold” from a “buy.” But investors nonetheless saw opportunities to buy. Teradyne gained 19 cents to $13.06, while ON Semiconductor rose 9 cents to $3.07.

The third-quarter earnings warnings extended to the biotech sector as well. Medical device maker Boston Scientific gained 61 cents to $36.34 despite cutting its outlook for third-quarter and fourth-quarter earnings.

Wendy’s International Inc. posted strong August sales despite 100 temporary restauraunt closures due to Hurricane Charley and other storms. Same-store sales, those from restaurants open at least a year, rose 2.8 percent, the company said. Wendy’s was up 12 cents at $34.49.

Advancing issues outnumbered decliners by about 7 to 6 on the New York Stock Exchange, where volume came to 128.7 million shares, compared with 104.78 million at the same point on Tuesday.

The Russell 2000 index of smaller companies was up 4.53, or 0.8 percent, at 552.46.

Overseas, Japan’s Nikkei stock average rose 0.4 percent. In afternoon trading, Britain’s FTSE 100 was down 0.6 percent, Germany’s DAX index dropped 0.6 percent, and France’s CAC-40 fell 0.5 percent.

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