Stocks Gain, Q3 Is Best for 2005

Stocks ended slightly higher on Friday, helping to push indexes to their best quarterly finish for 2005, as a dip in crude oil prices lifted shares of companies that are heavy users of fuel, including Caterpillar Inc. (CAT) and DuPont Co. (DD).

Procter & Gamble Co. (PG) shares rose 2.3 percent to $59.46 on the New York Stock Exchange and helped to lift the Dow. The consumer products company said its acquisition of razor and battery maker Gillette Co. (G) will become effective Saturday following approval by federal regulators.

The Dow Jones industrial average (search) rose 15.92 points, or 0.15 percent, to end at 10,568.70 and the Standard & Poor's 500 Index (search) gained 1.13 points, or 0.09 percent, to finish at 1,228.81. The Nasdaq Composite Index (search) advanced 10.47 points, or 0.49 percent, to close at 2,151.69.

For the third quarter, the Dow ended 2.9 percent higher, the Nasdaq gained 4.6 percent and the S&P 500 rose 3.2 percent as stocks overcame economic fallout from the devastating hurricanes Katrina and Rita.

"Wall Street skated through a lot of nasty weather this quarter, but I think there still may be a squall coming through in the fourth quarter as we learn more about damage from the hurricanes from companies that do business in the South," Frederic Dickson, chief market strategist at D.A. Davidson & Co., said.

For the third quarter, energy shares led advances, gaining 32.9 percent. Consumer discretionary shares were the biggest drag on the S&P 500, ending down 7.5 percent as investors worried about the effect of high gasoline prices on household budgets.

Trading on Friday was active, with 1.54 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 1.67 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year.

The number of stocks rising outpaced those declining by nearly 5 to 3 on the NYSE. On Nasdaq, advancers led decliners by about 3 to 2.

"It looks like a lot of investors made quarter-end adjustments yesterday as they put cash to use at the quarter's end," said Steve Neimeth, portfolio manager at AIG SunAmerica Asset Management. "Today it seems like the economic news wasn't particularly surprising and the energy markets were relatively flat."

U.S. crude for November delivery fell 55 cents to settle at $66.24 a barrel.

Even as falling oil prices benefited the broader market, they hurt energy shares, including Exxon Mobil Corp. (XOM), which fell almost 2 percent, or $1.26, to $63.54 on the NYSE.

The S&P Regional Banks Index fell 1 percent after Merrill Lynch cut its ratings on some of its components, including Huntington Bancshares Inc. (HBAN). . Huntington shares ended down almost 3 percent, or 66 cents, at $22.47.

By contrast, shares of Micron Technology Inc. (MU) climbed 9 percent, or $1.11, to $13.30 on the NYSE after the semiconductor maker reported an unexpected quarterly profit.

And shares and options of Google Inc. (GOOG) were active on market talk that the Web search provider would be added to the S&P 500 after the close of trading on Friday.

Google ended up 2.2 percent, or $6.84, at $316.46 on Nasdaq.

Caterpillar rose 1.3 percent, or 76 cents, to $58.75 and DuPont gained 1.5 percent, or 56 cents, to $39.17. Both trade on the NYSE.

In economic data, The National Association of Purchasing Management-Chicago business barometer surged to 60.5 in September from 49.2 in August. Economists had forecast the index at 51.0.

The University of Michigan's index of consumer sentiment dropped more than expected in September, falling to 76.9 from 89.1 in August.

Another government report showed U.S. consumer spending dropped a larger-than-expected 0.5 percent in August, the biggest decline since November 2001.