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US Shares Rise As Oil Prices Fall

Posted on: Thursday, 8 September 2005, 09:00 CDT

US shares rise as oil prices fall

NEW YORK, Sept. 7 (Xinhua) -- US shares rose slightly Wednesday as crude oil and gasoline futures prices dropped sharply for a second straight day.

Light sweet crude futures for October deliveries fell 1.59 dollars to close at a three-week low of 64.37 dollars a barrel on the New York Mercantile Exchange, as the market reacted to a faster- than-expected recovery of oil operations in the Gulf of Mexico after Hurricane Katrina. Gasoline futures dropped 16.17 cents to 2.0222 dollars per gallon.

Large-cap stocks got a bounce after the Energy Information Administration said Wednesday morning that it sees US retail gasoline prices falling to 2.58 dollars a gallon in the fourth quarter. The administration also slashed its forecasts for growth in US oil demand this year and next, saying higher costs would deter consumption.

The Department of Labor revised second quarter productivity growth down to a 1.8 percent annual rate instead of the 2.2 percent in a preliminary report. The department also reported an increase in labor costs to 2.5 percent from 1.3 percent. It dampens the investors, as higher wages are one of the indicators of inflation the Federal Reserve will weigh as it considers its interest rate policy.

The Dow Jones industrial average rose 44.26, or 0.42 percent, to 10,633.50. Broader stock indicators were slightly higher. The Standard &Poor's 500 index rose 2.97, or 0.24 percent, to 1,236.36, and the technology-laced Nasdaq composite index rose 5.17, or 0.24 percent, to 2,172.03.

Declining issues led advancers by roughly 8 to 7 on the New York Stock Exchange where the volume was 1.45 billion, up from 1. 42 billion on Tuesday.

Source: Xinhua News Agency - CEIS

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