Wall Street rallied to finish mostly higher Friday, capping off the week with two days of gains as Hurricane Rita lost strength and raised hopes that its impact on key Gulf Coast refineries wouldn't be as bad as initially feared.
With Rita headed for the Texas coastline -- the heart of U.S. oil production -- investors had braced for a repeat of the devastation caused by Hurricane Katrina last month. By Friday afternoon, however, Rita weakened two notches to a Category 3 hurricane, sending oil prices down more than $2 and easing the mood on Wall Street.
But trading volume remained light while traders kept an eye on the storm, projected to strike the Texas-Louisiana border early Saturday morning. And despite a drop in energy prices, the Dow Jones industrial average posted a small loss Friday.
"I think whenever you have something that's an event that could create news over the weekend, people get a little more cautious about putting money on the table," said Susan Malley, chief investment officer for Malley Associates Capital Management.
The Dow dropped 2.46, or 0.02 percent, to 10,419.59, after sliding as much as 49.75 in early activity.
The broader stock indicators moved higher. The Standard & Poor's 500-stock index rose 0.67, or 0.06 percent, to 1215.29, and the Nasdaq composite index gained 6.06, or 0.29 percent, to 2116.84.
For the week, the Dow lost 2.09 percent, the S&P 500 declined 1.83 percent, and the Nasdaq fell 2.01 percent.
The tech sector held its ground despite lackluster reports from Oracle and Palm late Thursday.
Oracle fell $1.07 to $12.45 after failing to impress analysts with a modest profit increase. Sales of database software rose just 2 percent last quarter.
Palm, maker of the Treo "smart phone," fell $6.28 to $28.69 after saying higher costs and slumping organizer sales contributed to a 7 percent decline in quarterly earnings.
Goodyear Tire & Rubber rose 50 cents to $15.50 after it said it would close plants as part of a broad restructuring.
New York Stock Exchange composite index fell 0.96, to 7518.90.
American Stock Exchange index rose 2.96, to 1723.46.
Russell 2000 index of smaller-company stocks rose 4.30, to 655.46.
NYSE: 2.01 billion shares, down from 2.42 billion on Thursday. Advancers narrowly outnumbered decliners.
Nasdaq: 1.64 billion shares, down from 1.72 billion. Advancers outnumbered decliners 8 to 5.
Crude oil for November delivery: $64.19, down $2.31.
Gold for current delivery: $463.50 a troy ounce, down from $466.60 on Thursday.