Wall Street rallies as oil prices slide and the expectation that the
House will pass a housing relief bill overshadows a slew of mixed
quarterly financial reports.
The 30-stock Dow Jones industrial average was up 0.4%. The tech-heavy
Nasdaq composite gained 1.3% and the broader Standard & Poor's 500
index advanced 0.7%.
Oil prices continued their decline Wednesday, sinking below $127
a barrel as a hurricane headed for the Texas Gulf coast appeared
unlikely to cause much disruption to offshore production.
The House was expected to vote on the bill Wednesday, and it could
become law as early as this week. The government would help struggling
homeowners get new, cheaper loans and be allowed to offer troubled
mortgage giants Fannie Mae and Freddie Mac a cash infusion as part of legislation that aims to calm the chaotic housing market.
Washington Mutual reported a $3.3 billion quarterly loss late
Tuesday, far worse than Wall Street was anticipating, as it set aside
more money for bad loans. Yet, the company offered signs of
encouragement as delinquencies in its troubled subprime and home equity
portfolios showed "early signs of stabilization."
Northwest Airlines reported a net loss for the second quarter, blaming the rising price of jet fuel for sending it into the red.
Costco warned Wednesday that its fiscal fourth quarter earnings
will fall well below the $1-a-share Thomson Financial analyst consensus
estimate, as the warehouse club operator tries to hold prices steady
even as energy-related costs surge.