Wall Street: Stocks rebound from sharp sell-off, up 260 points
NEW YORK (AP) ” Wall Street capped a volatile week with a big advance today, rebounding from a steep sell-off as investors sought bargains and cheered a milder-than-expected drop in a regional manufacturing report.
The Dow Jones industrial average rose about 260 points today, giving the blue chips a gain of more than 3 percent for the week, while broader indexes finished the week with gains of 2 percent to 3 percent.
The markets are closed for Good Friday.
Besides the manufacturing reading from the Philadelphia Federal Reserve, a plunge in commodities prices gave investors some hope that lower energy and food prices might boost consumers’ discretionary spending and ease inflation concerns. Crude oil fell, while gold prices declined sharply.
Stocks had wobbled in the early going Thursday after the Labor Department said the number of newly laid off workers filing for unemployment benefits rose last week by a more-than-anticipated 22,000 to 378,000. That level is the highest in nearly two months.
But Wall Street found reason to buy back into stocks when the Philadelphia Fed said manufacturing activity is dropping in March by less than it did in February, and by less than many economists anticipated.
Investors appeared relieved about the report, but economic jitters are far from alleviated. On top of the disappointing jobless claims report, the Conference Board said Thursday that its index of leading economic indicators fell, as expected, for the fifth straight month in February.
The markets are apt to stay volatile for some time, as investors digest news on the economy and the troubled financial sector.
“It’s the every-other-day theory ” up one day, and down the next,” said Scott Brown, chief economist at Raymond James & Associates.
According to preliminary calculations, the Dow rose 261.66, or 2.16 percent, to 12,361.32.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 31.09, or 2.39 percent, to 1,329.51, and the Nasdaq composite index rose 48.15, or 2.18 percent, to 2,258.11.
Bond prices rose Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.34 percent from 3.41 percent late Wednesday.
Light, sweet crude fell 70 cents to settle at $101.84 on the New York Mercantile Exchange. Gold fell $33, or 3.5 percent, to $912.3 an ounce, while the dollar was mixed against other major currencies.
Todd Salamone, director of trading for Schaeffer’s Investment Research in Cincinnati, said investors appeared somewhat optimistic.
“There’s some belief out there that the worst is behind us, but that’s not necessarily written in stone,” he said. “You’re getting a strong bid in financials and housing stocks ” sectors that have been the cause for the jitters.”
Shares in energy and metals companies were mixed. ConocoPhillips rose $1.22 to $74.83; Barrick Gold Corp. fell $3.25, or 7.2 percent, to $42; and Newmont Mining Corp. fell $2.75, or 5.6 percent, to $45.97.
In earnings news, Nike Inc. reported late Wednesday a 30 percent gain in quarterly profit, signaling to Wall Street that some companies are faring well despite the credit crisis. Nike said sales overseas increased largely because of the weak dollar. Nike rose $5.44, or 8.8 percent, to $62.27.
In other corporate news, Borders Group Inc., which has been reporting disappointing earnings in recent quarters, revealed early Thursday it may put itself up for sale. The nation’s second-largest bookseller said it has lined up $42.5 million in financing so it can continue operating. Borders fell $2.03, or 29 percent, to $5.07.
Investors faced fresh concerns about tightness in the credit markets. CIT Group Inc. fell $2.01, or 17 percent, to $9.63 after the financial-services company said it is tapping into its $7.3 billion in credit lines to repay debt and finance its commercial lending business.
The company says it cannot obtain financing from other sources.
Despite the lingering credit concerns, most financial shares showed big gains.
Some on Wall Street have sounded a more upbeat tone about the financial sector, particularly after JPMorgan Chase & Co. struck a deal Sunday to acquire the troubled Bear Stearns Cos., which has struggled with evaporating liquidity.
Punk, Ziegel & Co. analyst Richard Bove wrote in a research note that the financial sector’s worst problems were over.
Among financials, Morgan Stanley rose $6.22, or 14 percent, to $49.67, while Citigroup Inc. rose $2.09, or 10 percent, to $22.50.
Though the week was a shortened one for Wall Street, the volatility packed into four days has made it feel much longer. Nervousness blanketed Wall Street’s open Monday as investors fretted over JPMorgan’s buyout of Bear Stearns at $2 a share when the stock had closed in the prior session at $30. Stocks ended mixed Monday only to soar Tuesday when the Fed cut its benchmark interest rate by 0.75 percentage point to 2.25 percent.
The Dow jumped 420 points, its biggest point gain in more than five years. Then, on Wednesday renewed concerns about the financial sector punctured the gains, sending the Dow down nearly 300.
On Thursday, the Russell 2000 index of smaller companies rose 17.29, or 2.60 percent, to 681.42.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to a heavy 2.77 billion shares compared with 1.97 billion shares traded Wednesday.
Stock markets overseas were mostly lower. Hong Kong’s Hang Seng Index fell 3.5 percent, but the Shanghai Composite Index closed 1.1 percent higher after an early plunge. Britain’s FTSE 100 closed down 0.91 percent, Germany’s DAX index lost 0.65 percent, and France’s CAC-40 0.49 percent.
Japan’s markets were closed for a national holiday.
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INCLINE VILLAGE, Nev. — Hyatt Regency Lake Tahoe Resort, Spa and Casino is hosting a career fair from 2-7 p.m. Tuesday, May 11.