Posted on 04/12/2005 1:04:12 PM PDT by RWR8189
NEW YORK (Reuters) - U.S. stocks climbed on Tuesday, rebounding from earlier losses, after investors read minutes from the Federal Reserve as reiterating a measured approach to raising rates, while crude oil tumbled to below $52 a barrel.
Investors were reassured that the Fed -- which has raised interest rates seven times since June -- would continue to increase the cost of borrowing gradually.
"What this tells you is ... the most likely path is for the Fed to continue to raise rates at a measured pace in the period ahead rather than becoming more aggressive," said Michael Sheldon, chief market strategist at New York brokerage Spencer Clarke.
Meanwhile, U.S. light crude futures for May delivery slumped $1.85 to settle at $51.86, continuing to retreat from their recent record high at $58.28. Falling oil prices generally boost stocks, as they ease worries about clipped corporate earnings and weaker consumer spending.
The Dow Jones industrial average was up 59 points, or 0.56 percent, at 10,507. The Standard & Poor's 500 Index was up 6.43 points, or 0.54 percent, at 1,187.64. The Nasdaq Composite Index was up 10.34 points, or 0.52 percent, at 2,002.46.
Market watchers cited the Fed minutes for the turnaround in stocks.
"They made it clear that a majority wanted to keep 'measured' in the language, and as a result, stocks are reacting positively," said Stuart Hoffman, chief economist for PNC Financial Services Group. "The majority seem to feel that inflation, especially core inflation, is limited."
Shares of financial stocks, sensitive to interest-rate rises, gained after the reassurance on the Fed's continued gradual pace of rate hikes. The Philadelphia KBW Bank Index shot up 1.22 percent.
Early in the session, stocks were dampened by the U.S. trade gap for February widening to a record $61.0 billion, according to a government report. That was greater than what economists polled by Reuters expected.
Among individual stocks, auto-related companies continued to fall, in the aftermath of Ford Motor Co.'s (F.N: Quote, Profile, Research) profit warning last week, and General Motors Corp. (GM.N: Quote, Profile, Research) warning last month. Several auto-parts makers fell through 52-week lows. Visteon Corp. (VC.N: Quote, Profile, Research), which gets about 70 percent of its revenue from Ford, fell 2.3 percent to $5.11. Ford fell 2.9 percent to $10.14, while GM slipped 0.4 percent to $29.12.
Shares of eBay Inc.(EBAY.O: Quote, Profile, Research) were the heaviest weight on the Nasdaq 100, falling 2 percent to $33.24, amid speculation that the company's earnings and outlook coming up on April 20 may disappoint.
Shares of companies facing asbestos liability lawsuits soared on Tuesday after bipartisan Senate support appeared likely for planned legislation to create a $140 billion U.S. fund to compensate victims. W.R. Grace & Co. (GRA.N: Quote, Profile, Research) surged 23 percent to $9.89 while USG Corp.(USG.N: Quote, Profile, Research) jumped 20 percent to $42.34.
Today was a wash.
If oil has gone below 52 how come gas prices have not gone down. But when oil goes up gas prices go up same day. I smell shadiness.
Because oil has to be REFINED into gasoline!
Not sure what you're smellin'....
that's what happens when you don't use your BRAIN instead of your nose ROFLMAO
Gas prices did go down in my area (central Ohio) by a couple of cents per gallon today. Prices have slowly (too slowly) have been coming down for the last week.
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That said, I think we're seeing the fact that even bears have limits, and I'm acting on the expectation that we've hit a support level and can expect more of the same kind of activity we've been having for the past year.
I can tell you that the trend sure has been my friend lately. I wouldn't mind a five percent jump in April one bit.
Why do you have to be an ass? If you notice when OIL goes up GAS goes up immediately (same day). But when oil goes down gas does not go down immediately(same day). And if you do not believe people manipulate the gas market then you are not using your brain.
The price display at your local gas station is not hotwired directly to the main computer at the crude oil futures market, however, over time, gas prices track oil prices pretty darned closely, as you can see in the graph below.
nice graph. can we see one for the past 6 months?
I Googled for that one.
You are welcome to Google for a better one.
In my area of Cincinnati, gas prices are down 15 cents since last week ($2.19 vs $2.34).
Well, the obligatory oil refinery fire/pipeline rupture/explosion is yet to occur in anywhere USA to further tighten the supply of gas. Although the one at the BP plant didn't affect them for too long. Then we need to have Memorial Day price increases to account for all the travelers, then we roll right into the "summer driving season".
If it smells like shadiness, if it looks like shadiness, if it tastes like shadiness, then it must be shadiness.
CA gas is @ $2.63 per gal. for Reg unleaded. But that is thanks to the envirowhackos who won't let anyone build refineries or explore and drill, not counting the fact that we have our "own CA blend".
At least the prices are retreating, and as the graphs show, gas prices at the pump will soon follow. It just takes time.
Cheers!
shows gas prices as under $1/gal until last year, and averaging sommething like 60 cents/gal for most of the 90's.
Not in the US that I live in! Due to age-related CRS, I can't remember when gas was under $1 a gallon, so I went to DOE data here and see that it's been above $1 since 1980 (except for a brief spell in Reagan's 2nd term, where it dipped into the 90 cent realm) as measured in real dollars. There's a slight change if you use 'constant' dollars chained to, say, year 2000 - as the Feds do in my link - but that just makes the distant past look worse, because of high inflation way back when.
Bottom line: the right hand axis showing 'pump price' is highly suspect, therefore I don't trust the graph in toto.
You are lucky.
In mid-March here in Phoenix, it was $1.99 and as of today, it is at $2.65 in the Scottsdale area as well as in North Phoenix at many stations, and about $2.40 where I live.
I prefer Costco as they seem to be the cheapest at about $2.29.
Haven't seen any price decrease at all.
There is also the "if-you-think-it's-so-easy" proof that price swings are not exacerbated by gas station owners in their favor. Anyone who cares can open up a futures trading account with as little as a hundred bucks, and trade options on the spot market price. Orders of magnitude leverage in these trades. If you think prices will go up to a certain level by a certain month, it is a simple matter to execute a trade based on your belief. If you are right, you will make far in excess of the difference you would pay at the pump.
The vast majority of options expire worthless however, so perhaps it is not so easy to manage the price swings. And remember, these are spot prices you can trade on, every trading day, with just paper inventory. The gas station owners trade on the retail price on a much longer cycle with inventory, making it more difficult for them to turn on a dime and dump a losing position.
If you want to pinch pennnies at the pump, try using Gas Buddy and plan your gas purchases ahead of time so you can extend the range of which stations you use. If this gets you especially worked up, you can call up the gas distributors in town to see if they will cut you a deal for a bulk purchase of gasoline; most will not, but occassionally you might run across one who is feeling especially cocky that day. What might work even better is to see if you can open a commerical account with a chain, and negotiate a bulk purchase up front of gas.
The only point I was making is that gas prices proportionally track crude oil prices. The graph demonstrates that.
As for your paranoia and conspiracy theories, you're on your own.
I too look for the cheapest price to fill up with...
However, I refuse to give the democrat party my money in any form. Are you aware that %90 percent of Costco's political contribution goes the Rat party?
Check WalMart's gas prices...Their political contributions go to the Pubbies war chest...just a thought...
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