The markets rebounded Wednesday on news of increased consumer confidence. But investors remained cautious, as oil prices climbed, and tech stocks
remained flat.
After falling to a two-month low on Tuesday, the Dow Jones Industrial Average
jumped 18.49 points higher on Wednesday to close at 10796.26. The NASDAQ
Composite Index rose 2.05 to 2.228.94.
Stock prices came out of the gate strongly on Wednesday morning on a report by
the Conference Board that consumer confidence in the economy leaped forward
in December. The renewed confidence came because of declining oil prices,
which are near levels posted before Hurricane Katrina.
However, later in the day, oil prices began to climb, when Iran urged the
Organization of Petroleum Exporting Countries to begin cutting oil
production by as much as 1 million barrels a day.
Covad Communications was a leading tech stock gainer, after agreeing to settle a
long dispute with Verizon over DSL line-sharing. Covad stock
gained 29 cents to 96 cents a share, or a 43 percent increase.
The news wasn’t nearly as good for Internet retailer Overstock.com , which fell for a second straight day. After declining 7.40
percent on Tuesday, Overstock tumbled another 7.6 percent on Wednesday, to
close at $28.79.
Market watchers blamed Overstock’s Tuesday decline on a report that fourth-quarter growth had slowed to two times the industry average, rather
than the three to four times the average that the company had posted in the past.
The slump continued Wednesday, when Piper Jaffray cut its rating on
Overstock to “underperform” from “market perform.” The analyst said, “We
believe it could prove very difficult for Overstock to achieve profitability
under its current business model.”
Morgan Stanley’s high-tech index added 0.72 to 529.18.