By Ellen Simon
The Associated Press
New York – Stocks closed mostly higher Tuesday after Federal Reserve Chairman Alan Greenspan said the economy has weathered the increase in oil prices “reasonably well.
Earlier in the session, stocks fell after consumer confidence hit its lowest point in two years, raising fears that U.S. shoppers might cut their spending and slow the economy.
But Greenspan calmed investors by emphasizing “the incredible resilience of the U.S. economy in terms of flexibility,” said Lynn Reaser, chief economist for the investment strategy group at Bank of America.
Speaking to the National Association for Business Economics in Chicago, Greenspan emphasized that before policymakers respond to disasters, markets react through prices, interest rates and exchange rates, which work together to cushion the economy.
That was just what investors wanted to hear after the Conference Board said its consumer confidence index dropped even more than analysts expected, falling 18.9 points in September for a reading of 86.6, down from 105.5. Economists were expecting a reading of 98.
The Dow Jones industrial average rose 12.58, 0.12 percent, to 10,456.21.
Broader stock indicators were slightly lower. The Standard & Poor’s 500 index rose 0.03 to 1,215.66, and the Nasdaq composite index fell 5.04, 0.24 percent, to 2,116.42.
The Bloomberg Colorado Index, a price- weighted list of companies based in the state, rose 0.04, less than .1 percent, to 314.33.
Bonds were unchanged, with the yield on the 10-year Treasury note rising at 4.29 percent. The U.S. dollar was mixed against other major currencies in European trading. Gold prices were lower.
Crude oil futures sagged. A barrel of light crude was quoted at $65.07, down 75 cents, in trading on the New York Mercantile Exchange.
The prevailing feeling on Wall Street now is that some of the issues raised by Hurricane Katrina will linger.
