u.s. stocks near flat as oil jumps

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    U.S. stocks near flat as oil jumps, Fed chief talks
    AAP News
    9:09:020 17/02/2005
    (Updates to close)
    By Megan Davies
    NEW YORK, Feb 16 (Reuters) - U.S. stocks finished almost
    flat on Wednesday, with the S&P 500 inching up to a fresh 2005
    high on a day when energy companies' shares rose after crude
    shot above $48 a barrel, while financial stocks fell after the
    Fed chairman said interest rates are still low.
    Exxon Mobil Corp., a component of both the Dow and the S&P
    500, was among energy stocks hitting fresh highs as crude oil
    prices spiked on worries that OPEC might cut output this
    Federal Reserve Chairman Alan Greenspan told the Senate
    Banking Committee the economy is in good health, but said
    interest rates are still "fairly low" after six straight
    increases, which was viewed as confirmation that more
    interest-rate hikes lie ahead.
    While that helped support the overall market, it hurt
    interest-rate-sensitive stocks such as banks and financial
    services companies. The S&P index of financial stocks fell 0.6
    "Greenspan was clearly the story of the day and he didn't
    say anything unexpected -- and the market doesn't like
    uncertainty," said David Memmott, head of listed block trading,
    Morgan Stanley.
    The Dow Jones industrial average was down 2.44 points, or
    0.02 percent, to end at 10,834.88. The Standard & Poor's 500
    Index edged up just 0.22 of a point, or 0.02 percent, to finish
    at 1,210.34. The Nasdaq Composite Index was down 1.78 points,
    or 0.09 percent, to close at 2,087.43.
    The S&P 500's slim gain to a fresh high for the year marked
    its longest winning streak since a rally that started in late
    October 2004.
    After the closing bell, Hewlett-Packard Co. rose 2 percent
    to $21.50, as it posted a quarterly profit that rose slightly,
    helped by gains across all of its businesses.
    Trading was active, with 1.49 billion shares changing hands
    on the New York Stock Exchange, just above the 1.46 billion
    daily average for last year. About 1.89 billion shares were
    traded on Nasdaq, above the 1.81 billion daily average last
    year. Advancers outnumbered decliners on the New York Stock
    Exchange by about 9 to 8 and by about 16 to 15 on Nasdaq.
    "What you have is the long, plain-vanilla funds who are
    saying it's OK to buy stocks now," said Jim Fehrenbach, head of
    Nasdaq trading at Piper Jaffray in Minneapolis. "The thing
    they've been waiting for all week turned out to be not that big
    a deal -- so now they can get back to what they were doing
    before Greenspan, which is buying stocks."
    The market had a jittery morning, fueled by concerns
    regarding Iran. Iranian television sent waves through world
    financial markets when it reported an explosion along the coast
    from Iran's only nuclear plant, but officials calmed fears
    saying the blast was part of construction work.
    "We had an overreaction this morning to the Iran situation
    but since then we've got energy extremely strong, which is
    pulling up the Dow," said Memmott.
    Among the gainers, Exxon Mobil rose 2.7 percent, or $1.56,
    to $58.48, while ConocoPhilips gained 2.9 percent, or $2.93, to
    $104.31. The S&P Energy Industry Group index rose 2.73 percent.
    Of the 28 stocks in the group, 16 hit lifetime highs on
    While high oil prices are a negative for stocks overall as
    they squeeze company earnings and cut consumer spending, they
    help oil companies. NYMEX crude for March delivery ended well
    above $48 a barrel, hitting its highest price in almost three
    weeks to settle $1.07 higher at $48.33 a barrel.
    Interest-rate-sensitive stocks such as financials were
    lower as Greenspan said in congressional testimony that even
    after six quarter-percentage-point hikes since June, the
    official federal funds rate "remains fairly low."
    Citigroup Inc. declined 22 cents to $49.18, Wachovia Corp.
    dropped 37 cents to $54.54 and Bank of America Corp. fell 29
    cents to $46.77.
    Among gainers, Coca-Cola Co. rose 65 cents, or 1.5 percent,
    to $43.30 after it reported higher quarterly net income.
    But insurer American International Group Inc. fell 1.7
    percent, or $1.25, to $70.60. On Tuesday, two executives who
    worked at AIG pleaded guilty to fraud charges stemming from New
    York Attorney General Eliot Spitzer's probe of the insurance
    "Investors are worried there is a broader problem in the
    insurance industry than has already been disclosed. They are
    still trying to figure out what the investigators are planning
    to uncover," said Gerald Bollman, portfolio manager at Great
    Companies LLC in Clearwater, Florida.

    Reut 22:08 02-16-05
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