market summary
Close Dow +23.97 at 10313.07, S&P +5.54 at 1123.92, Nasdaq +24.66 at 1894.31: It was a slow start for the market - that lasted six hours in fact - when a rally swept the indices and translated into a close near session highs... The catalyst for the uptick was - in the absence of other influential news items - the sudden reversal in the price of crude oil... The commodity had begun the day with gains, but then quickly reversed course after hitting a two-week high...
Traders used the strength as an opportunity to take profits, particularly in the presence of Hurricane Ivan (that was approaching the Gulf of Mexico, where 25% of US oil production takes place) and the anniversary of the September 11 attacks on Saturday... This led buyers to place more money in the sectors that had outperformed all day - namely tech... Indeed, the group was the standout name of the session thanks to a ruling against the Department of Justice in the Oracle/PeopleSoft matter... Oracle (ORCL 10.46 +0.53) can now proceed with its proposed $7.7 bln acquisition of PeopleSoft (PSFT 19.89 +1.94), and will likely raise the offer price to sweeten the deal for PeopleSoft shareholders...
As for the blue chips, they managed a positive finish but were held back most of the day by losses in energy (off the aforementioned oil plunge) and basic material...The latter trailed following Alcoa's (AA 30.70 -2.59) reduced Q3 (Sept) guidance on softness in the automotive, packaging, and European end markets... Economically-sensitive issues (like retail and transportation), though, generally outperformed the broader market thanks to bullish economic data... The July Trade Balance shrank to -$50.1 bln (consensus of -$51.5 bln) and the August PPI index dropped 0.1% (consensus of +0.1%) - effectively easing worries about a surge in inflation...SOX +3.4, NYSE Adv/Dec 1992/1286, Nasdaq Adv/Dec 1853/1204
