Times Leader

Friday, August 20, 2004 Page: 1C

Leading indicator drops
A closely watched gauge of future business activity fell in July for the
second consecutive month.

The Conference Board said Thursday that its Composite Index of Leading
Economic Indicators dropped by 0.3 percent in July to 116.0, following a
revised decline of 0.1 percent in June. Last month was the first time in more
than a year that the index had lost ground, and the July decline was larger
than the 0.1 percent dip forecast by analysts.

The index is closely followed because it is designed to forecast the
economy’s health during the coming three to six months. Economists said the
new reading, taken together with a mixed batch of other recent data, points to
slower growth in the months ahead.

Ken Goldstein, an economist with the Conference Board, said the continued
decline in the index reflects the effect that a host of factors – from energy
prices to worries about terrorism – are having on the economy.

In other economic news, the Labor Department reported Thursday that the
number of Americans filing new claims for unemployment insurance dipped by

in claims. The four-week moving average of claims, which smooths out
fluctuations in the often-volatile figures, fell to 337,000 from 339,500 in
the previous week.





Oil prices near $49

Crude futures rose to a high near $49 a barrel Thursday as the threat of
sabotage to Iraqi oil infrastructure loomed larger than promises from Baghdad
to boost exports in coming days.

Those fears were amplified late in the day after Shiite militants broke
into the headquarters of Iraq’s South Oil Co. and set the company’s warehouses
and offices on fire, witnesses said.

Underpinning the market’s nervousness is the belief that the Organization
of Petroleum Exporting Countries – Saudi Arabia in particular – does not have
the ability to swiftly raise production high enough in the event of a major
global supply disruption.

U.S. light crude for September delivery rose $1.43 to close at $48.70 on
the New York Mercantile Exchange – the highest Nymex settlement on record.
When adjusted for inflation, oil is roughly $8 less per barrel than it was
leading up to the first Gulf War.

There were also technical factors behind Thursday’s rally. Traders said
those who had waited on the sidelines in recent weeks, hoping that prices
would fall, came into the market as buyers on Thursday in order to secure next
month’s supply. The September contract expires Friday.





Stocks sag as oil rocket

With the much-ballyhooed initial public offering of Google Inc. behind them
and oil chugging to a new record high, investors took a step back Thursday,
sending stocks lower.

The Dow Jones industrial average declined 42.33, or 0.4 percent, to

The Standard & Poor’s 500 index was down 3.94, or 0.4 percent, at 1,091.23.

The downward trend underscored that the equity market is deeply mired in
the trading doldrums characteristic of late summer, though analysts noted
there are additional pressures this year. Fears that the Olympics in Athens or
the upcoming Republican convention in New York might be targets of terrorism
have kept an unusual number of investors on the sidelines, and oil prices
aren’t helping, said Janna Sampson, director of portfolio management at
Oakbrook Investments.

PRICE TO PUMP



AAA, the national auto club, reported the following average price in the
Scranton/Wilkes-Barre/Hazleton area for a gallon of regular unleaded gasoline.

Yesterday $1.861

Two days ago 1.842

A month ago 1.889

A year ago 1.551

Record high 2.027 (5/29/04)

: www.fuelgaugereport.com