The soothing words of Federal Reserve Chairman Alan Greenspan helped boost stocks today after he reiterated his belief that rising oil prices do not pose an immediate threat to the U.S. economy.
Greenspan told a gathering of oil industry executives that the energy market would correct itself if left to its own devices, with higher prices spurring businesses and consumers to conserve, which will in turn result in lower prices over time.
Napster Up 10 Percent
Stocks posted modest gains, with the Dow rising 37.32 points, or 0.36 percent, to 10,458.46. The Nasdaq finished at 1,999.32, a gain of 8.25 points, or 0.41 percent, on the day. The S&P 500 rose 5.27 points, or 0.45 percent, to finish at 1,181.39.
One of the standout stocks on the session was Napster, which saw its Nasdaq-listed shares rise more than 10 percent after the music download site raised quarterly profit forecasts for the second time in a month due, citing strong sales.
On the Dow, one of the biggest movers was Morgan Stanley, which was down sharply after it confirmed it would spin off its Discover Card unit into a separately traded company.
Oil Backs Down
Oil prices did retreat today, falling 97 cents to $56.04 per barrel on the New York Mercantile Exchange, a drop of nearly $2 from intraday highs reached yesterday. In addition to Greenspan’s comments, a reduction in the long-term demand forecast for the European Union was seen dampening prices.
Investors will likely be looking to Greenspan for more insights later in the week, when he speaks to Congress about government-subsidized mortgage programs.
More insight on the current state of the economy might also be available next week when first-quarter earnings results begin to trickle in.