updated 10/7/2004 9:51:58 AM ET 2004-10-07T13:51:58

Stocks enjoyed a late-day rally Wednesday, finishing higher despite a new record price for oil and gloomy third-quarter outlooks from several companies. Volume was relatively light as investors awaited the government’s jobs creation report at the end of the week.

Major Market Indices

With rising energy costs threatening to dent consumer spending and corporate profits in the period ahead, oil and jobs have competed for the attention of traders on Wall Street. Many were looking ahead to the Labor Department’s September employment report, due Friday. If the number of new jobs created misses expectations, it could be troublesome for stocks, particularly retailers.

Analysts are also watching for positive signs in third-quarter earnings reports, following a series of profit warnings.

“What you would hope now is that we’ll see some upside surprises,” said Janna Sampson, co-Manager of the AmSouth Select Equity Fund and director of Portfolio Management at Oakbrook Investments. “That could buoy the market and help us take off. Until we get numbers out of those companies that haven’t warned, I think we’re somewhat directionless. There’s just nothing fundamental to drive the market until then.”

At Wednesday’s close the Dow Jones industrial average was up 62.24 points, or 0.6 percent, at 10,239.92, with much of the gain coming in the final hour of trading.

Broader gauges also closed modestly higher. The Standard & Poor’s 500-stock index rose 7.57 points, or 0.7 percent, to 1,142.05, while the technology-rich Nasdaq composite index advanced 15.53 points, or 0.8 percent, to 1,971.03.

Light, sweet crude for November delivery settled 93 cents higher at $52.02, as traders examined weekly U.S. inventory numbers. Crude inventories for the first week of October were up 1.1 million barrels and gasoline stocks were also higher, but a 2.1 million barrel decline in distillate fuels, which includes heating oil and jet fuel, suggests consumer spending may come under some pressure this winter.

With third-quarter earnings season just starting, a number of large companies are preparing to issue results, including Costco Wholesale Corp., Marriott International and Alcoa Inc. on Thursday, and General Electric Co. on Friday.

“GE’s breadth and industrial base will tell a lot about the condition of the economy,” said Ned Riley, chief investment strategist at State Street Global Advisors. “Those comments will be watched with quite a bit of interest, simply because of their size and how it reflects the pulse of the consumer on the industrial side.”

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Further raising concern about a possible slowdown in consumer spending, Big Lots Inc. blamed soft sales in September on the difficult economic environment. The nation’s largest closeout retailer adjusted its earnings and sales forecasts to reflect what it sees as a broad-based trend. Big Lots sank 4.6 percent, or 59 cents, to $12.15.

Also among companies offering bleaker outlooks, stock dealer Knight Trading Group Inc. dipped 20 cents to $9.39 after saying it expects an operating loss for the third quarter due to “persistent lackluster market conditions.”

In Washington, top officials with mortgage giant Fannie Mae, including chief executive Franklin Raines, defended the company’s accounting practices before a House subcommittee. Regulators have alleged earnings manipulation and management misdeeds at Fannie Mae, which finances one of every five home loans in America. Fannie Mae was up $1.45 at $67.45.

Investors were also eyeing the ramifications of the shortage of flu vaccine following the British government’s suspension of Chiron Corp.’s manufacturing license. Chiron, which provides about half of the flu vaccine used in the United States, added 34 cents at $38.32, following an 18 percent drop on Tuesday. The company slashed its earnings guidance and was downgraded by several brokerage firms.

Henry Schein Inc., one of Chiron’s major distributors, added $2.09 to $61.73, although it lowered its outlook for the rest of the year.

Sirius Satellite Radio Inc. gained 16 percent, or 52 cents, to $3.87, after shock jock Howard Stern announced he’d signed a five-year, multimillion dollar deal with the company to move his show to the fledgling broadcasting service in 2006. Sirius said it would spend $100 million a year to produce the show, but warned it needs 1 million new subscribers to cover the costs. Sirius had 480,341 subscribers at the end of the second quarter.

The news pressured Sirius’ main rival, XM Satellite Radio Holdings Inc., which fell 48 cents to $29.

Overseas, Japan’s Nikkei average gained 0.9 percent. In Europe, France’s CAC-40 dipped 0.2 percent, Britain’s FTSE 100 was down 0.02 percent and Germany’s DAX added 0.02 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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