Wall Street staged a moderate rebound Wednesday, a day after stocks tumbled amid questions about the strength of the economy and the soundness of upcoming corporate earnings reports.
Unease about the economy has caused market volatility since the start of the year, with stocks rising on hopes for more interest rate cuts, and plunging as investors doubt that will be enough. The market has been skittish with fourth-quarter earnings season about to begin and many questions lingering about the fallout from the mortgage and credit crisis.
Investors were jolted Tuesday by speculation that Countrywide Financial Corp. would file for bankruptcy protection, and after AT&T Inc.'s chief executive said the U.S. economic slowdown was hurting the company's consumer business. That sent the Dow Jones industrial average down nearly 240 points.
There was little in the way of economic news Wednesday as investors awaited a speech by Federal Reserve Chairman Ben Bernanke on Thursday that could give clues about the central bank's stance on the weakening economy.
In midmorning trading, the Dow Jones industrial average rose 82.59, or 0.66 percent, to 12,571.66.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 8.94, or 0.64 percent, to 1,399.13, and the Nasdaq composite index rose 20.87, or 0.86 percent, to 2,461.38.
By Tuesday's close, the Dow and S&P 500 had each fallen more than 5 percent in the new year; the Nasdaq is down nearly 8 percent this year. Tuesday's decline pushed the Dow and the S&P 500 down more than 11 percent from their highs in early October. A decline of more than 10 percent signals a market correction.
Bond prices rose Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.81 percent from 3.84 percent late Tuesday.
Oil prices slipped ahead of a U.S. government report that's expected to show crude oil stockpiles fell last week. Light, sweet crude for February delivery fell 27 cents to $96.06 a barrel on the New York Mercantile Exchange.
Wall Street is awaiting Alcoa Inc.'s quarterly report, which each quarter marks the unofficial start of earnings season. Investors are hoping the report, due after the closing bell, can provide insight into the well-being of the economy. Wall Street expects the aluminum producer will report a 55 percent drop in earnings per share, excluding restructuring charges. Alcoa, one of the 30 stocks that comprise the Dow industrials, rose 19 cents to $31.19.
Troubled discount brokerage E-Trade Financial Corp., which Tuesday saw shares dip to an all-time low on growing mortgage segment losses, said it sold about $3 billion of mortgage-backed securities and municipal bonds on top of the November sale of its $3 billion asset-backed portfolio. E-Trade rose 14 cents, of 6.2 percent, to $2.39.
Chemical maker DuPont Co. rose $2.71, or 6.3 percent, to $45.46 after raising its fiscal 2007 profit outlook, citing better-than-expected fourth-quarter sales. The company, which makes a wide range of products including automotive coatings and genetically modified seeds, also lifted its forecast for 2008.
Countrywide on Wednesday said it funded $23.4 billion of mortgage loans in December, up 1 percent from November. The lender, which on Tuesday declared it had no intention to file for bankruptcy, also said that lending activity for the quarter topped its forecast. Countrywide fell 58 cents, or 10.6 percent, to $4.90.
James Cayne stepped down as chief executive of Bear Stearns Cos. He was replaced by Bear Stearns President Alan Schwartz, a 57-year-old investment banker respected for his dealmaking savvy.
Overseas, Japan's Nikkei stock average closed up 0.49 percent. In afternoon trading, Britain's FTSE 100 fell 1.63 percent, Germany's DAX index dropped 0.69 percent, and France's CAC-40 fell 0.86 percent.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
No comments:
Post a Comment