Stocks Dip as Oil Soars; Google Shines

Thu Aug 19, 2004
By Megan Davies

NEW YORK (Reuters) - U.S. stocks slid on Thursday, ending four days of gains as oil prices continued their march higher, but Google Inc. (GOOG.O: Quote, Profile, Research) created a buzz as shares of the Internet search company surged on their debut.

Google, which had lowered its pricing range for the IPO, leapt 18 percent after trading began in late morning. Shares of smaller search engine Mamma.com Inc. (MAMA.O: Quote, Profile, Research) also jumped but Google's chief rival, Yahoo Inc. (YHOO.O: Quote, Profile, Research) , slipped.

However, oil continued to be the focus for investors after NYMEX crude oil futures (CLU4: Quote, Profile, Research) rose to carve a fresh record of $48.75 before settling at $48.70 as surging violence in Iraq spurred concerns over supply disruptions.

"Crude continues to be the name of the game and will provide a cap on any attempted rallies here for equities," said David Hegarty, head of equity trading for Commerzbank Securities.

High oil prices weigh on the stock market because investors worry about the impact increased energy costs will have on corporate profits.

The price hike contributed to ending the market's four-day rally and pushed the Dow Jones industrial average briefly back below the 10,000 mark during afternoon trading.

"Going into today, the S&P was up 30 points in three days so we were due for a little breather and oil was the catalyst," said Peter Boockvar, equity strategist at Miller Tabak & Co.

The blue-chip Dow Jones lost 42.33 points, or 0.42 percent, at 10,040.82. The Standard & Poor's 500 Index was down 3.94 points, or 0.36 percent, at 1,091.23. The technology-laced Nasdaq Composite Index fell 11.48 points, or 0.63 percent, to 1,819.89.

Trading was moderate, with nearly 1.3 billion shares changing hands on the New York Stock Exchange, below the 1.4 billion daily average for last year. About 1.4 billion shares were traded on Nasdaq, below the 1.69 billion daily average last year.

Decliners outnumbered advancers on the NYSE and the Nasdaq by about three to two.

On the economic front, investors were disappointed when the Philadelphia Federal Reserve said its regional manufacturing index slipped to 28.5 in August from 36.1 in July, well beyond forecasts of a decline to 32.0.

"The Philly Fed came in lower than expected so there was some slight disappointment there," said Hegarty.

Meanwhile, the Labor Department said initial claims for state unemployment insurance benefits dipped in the week ended Aug. 14, the third straight weekly drop.

In other news, a warning from semiconductor design software maker Synopsys Inc. (SNPS.O: Quote, Profile, Research) weighed on the Nasdaq. The company's shares plunged more than 31 percent, down $6.63 to $14.65 after it warned of a sharply lower-than-expected current-quarter profit and said orders would lag forecasts.

Google Inc. (GOOG.O: Quote, Profile, Research) , the year's most anticipated initial public offering, was a bright spot, rising $15.34 to $100.34 on its Nasdaq debut.

"I think it's a sign that people are still willing to take risks and that they're still finding stocks that are attractive," said Boockvar.

Rival Yahoo (YHOO.O: Quote, Profile, Research) was 1.3 percent lower, down 37 cents at $28.11.

Mamma.com rose 14.8 percent, up 78 cents at $6.04. FindWhat.com (FWHT.O: Quote, Profile, Research) nudged up 5 cents to $13.90, although Ask Jeeves Inc. (ASKJ.O: Quote, Profile, Research) fell 4 cents to $25.04.

 

 

 

 

 

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