WESTON, Fla., May 17, 2004 (PRIMEZONE) -- Stocks suffered another uneasy session on Friday as concerns over the price of crude and trouble in Iraq continued to weigh on investors. The Nasdaq Composite was down 21.5 points, to 1,904.25, while the Dow Jones industrial average held firm, gaining 2.13 points, to 10,012.87.
Crude oil futures rose after the U.S.-appointed head of the Iraqi Governing Council, Ezzedine Salim, was killed Monday near the U.S. headquarters in Baghdad. Also damaging investor confidence were Commerce Department figures showing the U.S. trade deficit widened by 9.1 percent to a record $46 billion, much higher than what analysts were expecting.
Stocks in the news include Lucent (NYSE:LU), which, sources say, maybe charged by the SEC for discrepancies in revenue recognition. The charge may also include a fine for failure to cooperate fully with the investigation.
Also, Nortel (NYSE:NT) was in the news, in a story relating to compensation to company executives, given just weeks before the telecom giant warned about having to restate its earnings.
And Oracle (Nasdaq:ORCL) made waves when it cut the price of its hostile takeover of rival PeopleSoft (Nasdaq:PSFT) to $7.7 billion.
The latest Federal Open Market Committee meeting was held on Tuesday, May 4, 2004, where the FOMC changed its tune somewhat, saying in its statement that "The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal," the FOMC said in its statement. "Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured."
In plain terms The Fed is saying that conditions have improved to the point that rates can start moving up from their current historically low levels, but will probably do so at a measured, and even pace . . . no 50 and 75 basis point hikes in the near future. The Fed also said it "continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity." Regardless, many analysts are saying the first rate increase may come as early as June.
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