Wall Street shrugs off terrorism threat

/ Source: The Associated Press

Investors struggled past concerns over a potential terror strike Monday, sending stocks modestly higher following an upbeat earnings report from Procter & Gamble Co. and a positive reading on manufacturing activity.

Financial stocks were under pressure following warnings from the government over the weekend that terrorists could target financial institutions including the New York Stock Exchange, Citigroup Inc., Prudential Financial Inc. and the World Bank.

But after spending much of the day in a slump, major market indicators ended modestly higher following a late round of buying, repeating a pattern now familiar from recent trading sessions.

At the close, the Dow Jones industrial average was up 39.45 points, or 0.4 percent, at 10,179.16. It was the Dow’s fifth straight advance, its longest rally of the year and the first time since late November-early December that it put together five consecutive winning sessions.

Other market indices finished higher. The Standard & Poor’s 500-stock index rose 4.90 points, or 0.4 percent, to 1,106.62, and the Nasdaq composite index advanced 4.73 points, or 0.3 percent, to 1,892.09.

Financial institutions in New York and Washington, including the NYSE and the Citigroup headquarters building, were under extra scrutiny Monday after the government gave an unusually detailed warning of possible terrorist attacks against them.

Police officers armed with assault weapons patrolled the sidewalks outside the NYSE in Manhattan’s financial district as well as the Citigroup headquarters building in midtown.

In a bid to reassure investors, New York Mayor Michael Bloomberg and Gov. George Pataki rang the opening bell Monday on the NYSE and urged the financial community to go about its business.

Sam Stovall, chief investment strategist at Standard & Poor’s, said concerns about terrorism, along with high oil prices and uncertainty about the economy, have been part of what investors are calling Wall Street’s “wall of worry.”

“And it’s not just everyday terrorism concerns. It’s linked to the conventions, the Olympics,” Stovall said. “How do you factor in an unknown event?”

Even amid the new terror concerns, a strong earnings report from leading consumer products maker Procter & Gamble helped provide an underpinning for enthusiasm on the market. P&G was up $1.19 at $53.34 after reporting that its earnings surged 44 percent in its fiscal fourth quarter.

The market also digested two economic reports that came out Monday morning, a surprise 0.3 percent decline in construction spending in June, and a July manufacturing survey from the Institute for Supply Management that, while upbeat overall, signaled declines in its measures of employment and prices.

Worries over the terror threat as well as the lackluster elements of the manufacturing report bolstered Treasury bonds Monday. Oil prices were also higher.

Financial stocks were somewhat lower amid the threat of terrorism against financial institutions. Prudential, whose Newark, N.J., building was cited as a possible target, was down 46 cents at $46.10. But shares in Citigroup were up 23 cents at $44.32 after being lower earlier.

Even in its early losses, the market showed signs of strength. Susan L. Malley, chief investment officer for Malley Associates Capital Management, said the terrorist warning dampened trading and kept volume light, but didn’t spark a flight from stocks.

“Terrorism was on the back burner, and it was economics that was driving the market, but the political conventions drew peoples’ attention to the possibility of some kind of terrorist action,” Malley said. “I’m interpreting this as a reluctance to put money in the market rather than a reason to take money out of the market.”

Cox Communications Inc., the nation’s fourth-largest cable TV provider, soared $5.58 or 20 percent to $33.16 after its Atlanta-based parent company Cox Enterprises Inc. announced a $7.9 billion proposal to buy all outstanding shares and take the company private.

Shares in other cable companies also rose. Industry leader Comcast Corp. was up $1.17 at $27.97, and Cablevision Systems Corp. surged $1.87 to $19.34.

Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange, where volume came to 945 million shares, about even with Friday’s pace. Overseas, Japan’s Nikkei stock average fell 0.9 percent. In afternoon trading, Britain’s FTSE 100 was up 0.06 percent, Germany’s DAX index was down 0.8 percent, and France’s CAC-40 was down 0.6 percent.