Stocks Climb on Slight Rise in GDP Growth

NEW YORK – Stocks edged higher in early trading Friday as Wall Street welcomed a moderate rise in gross domestic product growth in the third quarter.

Third-quarter GDP rose by 3.7 percent, according to the Commerce Department. While the figure was less than the 4.3 percent rise Wall Street had expected, it was stronger than the 3.3 percent growth in the second quarter.

Soaring oil prices in the third quarter were partly to blame for the slower-than-expected growth, analysts said, and as oil climbed through the $55 per barrel mark in October, investors feared a further slowdown for the fourth quarter as well. In early trading, a barrel of light crude was quoted at $51.20, up 28 cents, on the New York Mercantile Exchange.

In the first hour of trading, the Dow Jones industrial average rose 22.20, or 0.2 percent, to 10,026.74.

Broader stock indicators were slightly higher. The Standard & Poor’s 500 index was up 1.79, or 0.2 percent, at 1,129.23, and the Nasdaq composite index gained 3.82, or 0.2 percent, to 1,979.56.

Oil prices may have also contributed to a decline in consumer confidence. Investors awaited the University of Michigan’s revised consumer sentiment index, due at 9:45 a.m., for a reading on consumers’ confidence.

Rising oil prices helped ChevronTexaco Corp. to a 60 percent rise in third-quarter profits, though part of the gains came from one-time sales of non-strategic assets. With that gain aside, however, the nation’s second largest oil company, missed Wall Street profit forecasts by 3 cents per share. ChevronTexaco climbed 18 cents to $52.65.

Investigations of the insurance industry continued, with Connecticut’s attorney general subpoenaing Allstate Corp. in its probe of bid-rigging and price fixing throughout the industry. Allstate fell 18 cents to $47.52, while previous investigation targets Marsh & McLellan Cos. Inc. was down 38 cents at $27.84 and American International Group Inc. rose 5 cents to $61.26.

Halliburton Co. lost 15 cents to $36.10 after The Associated Press reported that the FBI has launched a probe into whether the U.S. government improperly awarded no-bid contracts to the company for services in Iraq.

The U.S. Food and Drug Administration said Merck & Co.’s new pain reliever Arcoxia, was “approvable” pending further review of clinical data. Arcoxia, which Merck hopes will replace the discredited Vioxx arthritis drug, was not expected to be approved. Merck gained 37 cents to $31.94.

Merck rival Bristol Myers-Squibb Co. slipped 15 cents to $23.86 after the drug maker reported a 16 percent drop in profits for the third quarter. The company’s results were in line with Wall Street expectations.

The Russell 2000 index of smaller companies was up 0.72, or 0.1 percent, at 586.35.

Overseas, Japan’s Nikkei stock average fell 0.75 percent. In afternoon trading, Britain’s FTSE 100 was down 0.1 percent, Germany’s DAX index rose 0.25 percent, and France’s CAC-40 gained 0.1 percent.

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