* Rising oil prices lift energy stocks
* FDIC's bank watch list swells, increasing worries
* Housing data mixed, consumer confidence improves in Aug
* Dow up 0.2 pct; S&P gains 0.4 pct; Nasdaq down 0.2 pct
(Updates to close)
By Steven C. Johnson
NEW YORK, Aug 26 (Reuters) - The Dow and S&P 500 rose on
Tuesday as hurricane fears lifted oil prices and boosted energy
shares, blunting the effect of a report that showed a growing
number of problem U.S. banks.
Trading volume was light and volatile, but traders said
energy prices were the key mover.
U.S. crude oil <CLc1>, which at one point broke above $117
a barrel, ended up 1 percent on fear that Hurricane Gustav
could disrupt output in the U.S. Gulf.[]
Shares of Exxon Mobil <XOM.N> rose 1.6 percent to $79.95,
making them among the biggest boosts for the S&P and the Dow.
"Energy was the story today, with the bounce in the oil
stocks being a reaction to the news of the hurricane," said
Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in
San Francisco. He also said the firmer dollar helped stocks.
But gains were limited by a report from the U.S. Federal
Deposit Insurance Corporation that said 117 U.S. banks were on
its troubled banks list at the end of the second quarter, up
from 90 after the first three months of the year.
[]
"We've had some failures already, so this watch list has
garnered a lot of attention," said Peter Kenny, managing
director at Knight Equity Markets in Jersey City, New Jersey.
"And it's not the number of banks so much as the size."
The FDIC said the assets of the banks on the problem list
totaled $78.3 billion through June, up from $26.3 billion at
the end of the first quarter.
The Dow Jones industrial average <> was up 26.62
points, or 0.23 percent, at 11,412.87. The Standard & Poor's
500 Index <.SPX> was up 4.66 points, or 0.37 percent, at
1,271.50. The Nasdaq Composite Index <> was down 3.62
points, or 0.15 percent, at 2,361.97.
Retailers rose, with the S&P retail index gaining 0.7
percent.
The S&P energy index <.GSPE> was up 1.8 percent.
Shares of Anadarko Petroleum <APC.N> jumped 6.4 percent
after the company announced a share repurchase program of up to
$5 billion.
The gain in the price of oil weighed on companies that are
sensitive to higher fuel costs, such as airlines. An index of
airline stocks <.XAL> was down 4.1 percent.
On the Nasdaq, Marvell Technology Group <MRVL.O> shares
fell 6.6 percent after Jefferies & Co. downgraded the microchip
design company's stock on concerns about its hard disk drive
inventory and weak cellular positioning.
Market gains were limited by minutes from the Federal
Reserve's last policy meeting, where officials said high energy
prices, a weak labor market and the housing slump would
continue to drag on the troubled U.S. economy. []
For now, consumer confidence appears to be holding up. A
Conference Board report on Tuesday showing consumers were
feeling more optimistic in August gave stocks an early boost
and helped offset a mixed bag of housing data.
The Standard & Poor's/Case-Shiller showed prices of
single-family homes fell at a record pace in June, though nine
of the 20 cities tracked showed price increases, up from seven
in May. []
But Gary Shilling, president of A. Gary Shilling & Co in
Springfield, New Jersey, said the data shows the housing slump
is far from over. "We think we will see prices falling until
the fourth quarter of 2010. There will be more write-downs at
financial institutions and a lot more problems for consumers."
Embattled mortgage finance giants Fannie Mae <FNM.N> and
Freddie Mac <FRE.N> rallied on hopes that a possible government
rescue would not necessarily wipe out shareholder value.
"I think there's a lot of speculation that maybe the
shareholders will get bailed out. So shareholders think, 'If I
buy this at $3 to $5 a share and the shareholders get bailed
out, I'm going to do great.' They're certainly not doing it on
the basis of fundamentals," said Mark Coffelt, chief investment
officer at Texas Capital Value Funds in Austin, Texas,
Fannie's shares rose 8.3 percent to $5.62 and Freddie's
shares jumped 20.7 percent to $3.97.
Trading volume was light on the New York Stock Exchange,
with about 841 million shares changing hands, well below last
year's estimated daily average of roughly 1.90 billion. On
Nasdaq, about 1.44 billion shares traded, also below last
year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones on the NYSE by
about 1.6 to 1 while on the Nasdaq, advancers beat decliners by
about 1.2 to 1.
(Additional reporting by Richard Leong; Editing by Leslie
Adler)
