New York – Wall Street zigzagged through a listless session Monday, closing mostly higher as a spate of acquisitions lifted the technology sector and energy prices extended their declines. The gains were limited by airline woes and worries about interest rates.
Monday’s $12 billion in merger activity signaled optimism on Wall Street two weeks after Hurricane Katrina’s devastation of the Gulf Coast threatened the U.S. economy, but the market treaded water while waiting to see if the Federal Reserve raises rates yet again at next week’s meeting.
Analysts are split over the Fed’s action, with some saying policymakers will stay on course while others believe rates should stay unchanged to fend off an economic retreat.
Investors felt some relief as oil and gasoline futures sank, pulled lower by reports that efforts to resume production are progressing after Katrina brought much of the Gulf Coast to a standstill.
A barrel of light crude fell 74 cents to $63.34 on the New York Mercantile Exchange, where gasoline futures also slipped 9 cents to $1.87 a gallon.
At the close of trading, the Dow Jones industrial average gained 4.38, or 0.04 percent, to 10,682.94.
The Bloomberg Colorado Index, a price-weighted list of companies based in the state, fell 0.41, or 0.1 percent, to 314.67.
Broader stock indicators were mixed. The Standard & Poor’s 500 index dropped 0.92, or 0.07 percent, to 1,240.56, while the Nasdaq composite index climbed 7.32, or 0.34 percent, to 2,182.83.
Wall Street has been speculating about the Fed’s rate policy, with many hoping the central bank will halt its string of 10 consecutive quarter-point raises to the nation’s benchmark interest rate in order to keep lending costs lower while the Gulf Coast rebuilds.
But some analysts say the Fed has spelled out clearly its intention of boosting rates to balance growth and inflation, and that Fed governors will stay on course despite widespread fears that higher rates will restrict consumer spending.
