BY ROBERT DOMINGUEZ
DAILY NEWS STAFF WRITER
The party didn’t last long.
Times Square and outside the White House weren’t the only streets where people were celebrating the death of Osama Bin Laden yesterday.
Wall Street reacted to the killing of the world’s most wanted terrorist with a rise in stocks when Monday’s markets opened — and a temporary dip in oil prices, which have been rising steadily due to the unrest in Libya and the Middle East.
But the stock surge fizzled and oil rose again by the afternoon, as investors’ euphoria over U.S. forces taking out bin Laden after a decade-long manhunt gave way to caution.
Many Wall Street analysts said there would likely only be a short-term gain for the market as investors focus on earnings, economic news and the rising price of oil that has helped spur gas prices in the U.S. to more than $4 a gallon – and the possibilty of renewed terror strikes.
“It’s not clear that bin Laden’s death is going to change the ongoing events” in the troubled Middle East, Russ Koesterich, head of investment strategy for asset manager BlackRock, told Bloomberg News.
“We got a psychological lift, but it doesn’t change anything.”
Traders had reason to be optimistic aside from the Bin Laden news, based on positive economic reports released on Monday morning.
U.S builders began work on more office buildings, hotels and factories in March, which raised construction spending after three straight months of declines, according to the Commerce Department. Construction spending rose 1.4%, the biggest boost since April 2010.
Manufacturing also grew for the 21st straight month in April, while several companies, including Chrysler and drug maker Humana, reported strong quarterly earnings.
The Dow Jones was down 6 points in mid-afternoon trading, after being up as much as 65 points earlier. Oil prices rose again after falling below $111 a barrel after news of bin Laden’s death spread worldwide.
Traders are still uncertain if Sunday’s events will result in more stability in the Middle East and Libya, or if retaliatory attacks by bin Laden supporters could affect oil supplies.