Saturday, November 18, 2017
 
 
News: Page (1) of 1 - 08/23/11 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook
Stocks jump; Dow headed for best gain in two weeks
Stocks rise broadly, putting Dow on track for its biggest jump in two weeks; BofA slides
By The Associated Press

NEW YORK (AP) ' Stocks surged Tuesday, putting the Dow Jones industrial average on track for its biggest gain in nearly two weeks. Investors were picking up cheaply priced stocks after fears that the U.S. would slip into a recession pounded the market over the last month.

The Dow rose 291 points, or 2.7 percent, to 11,146 in late afternoon trading and is headed for its best day since Aug. 11. It dipped about 60 points shortly after the quake hit the East Coast in the early afternoon, but recovered those losses within minutes. With less than an hour left in the trading day, the Dow jumped as high as 315 points.

Exxon Mobil Corp. rose the most of the 30 stocks in the Dow Jones industrial average, 4.6 percent. Chevron Corp. was also up more than 3.5 percent. Energy stocks got a push from a 1 percent increase in the price of oil, to $85 a barrel. The dollar fell against the euro and Japanese yen as investors moved money into riskier assets.



Stocks rallied despite a pair of weak economic reports. The Commerce Department said the number of people who bought new homes dropped for the fourth month in a row. A survey from the Richmond Federal Reserve bank showed a drop in manufacturing activity.

The Richmond Fed survey took on added weight after other bleak manufacturing surveys suggested the U.S. could enter another recession. The Philadelphia Federal Reserve bank's report last Thursday revealed steep falls in new orders and employment in the mid-Atlantic region. The Dow plunged 419 points that day.

The Richmond report, by contrast, pointed to a slowdown but not a recession, said James Paulsen, chief investment strategist at Wells Capital Management. "And when people are preparing for a recession, slow growth is good right now."

Paulsen said the pummeling stocks have taken has made the market seem cheap to many investors. The S&P 500 has lost 15 percent in the last month. The average cost for a stock in the index is now just 11 times the company's expected 2011 earnings. "That's too low if you're not in a recession," Paulsen said.

Bank of America Corp. sank 4 percent, the most of any Dow company. The stock has lost 36 percent this month as investors become increasingly worried about the bank's ability to raise capital and its liabilities related to subprime mortgages. The latest disappointment came Monday with news that BofA will not sell all of its 10 percent stake in China Construction Bank.

The S&P 500 index rose 34 points, or 2.7 percent, to 1,146. The Nasdaq rose 91 points, or 3.9 percent, to 2,437.

Major indexes eked out minor gains Monday following a four-week losing streak. During that time there were four days in a row in which the Dow Jones industrial average moved by at least 400 points, the first time that has happened in the Dow's 115-year history. Markets have been falling sharply since late July on signs that the U.S. economy is softening and on a flare-up in Europe's debt crisis.

One measure of the market's swings, the Chicago Board of Options Exchange's volatility index, has soared 42 percent this month. That's a sign investors are anticipating more wide swings in the S&P 500, the stock index most money managers use a benchmark. The index fell 15 percent Tuesday to 36 as concerns about future turbulence eased.

UBS rose 3 percent. The Swiss bank said it planned on cutting 3,500 jobs worldwide in the hope of saving $2.5 billion by the end of next year. UBS's stock has dropped 20 percent this year.

Better reports on manufacturing in Europe and China lifted world markets. Hong Kong's Hang Seng rose 3 percent and Germany's DAX rose more than 1 percent. Investors are also hoping Fed Chairman Ben Bernanke will announce some kind of assistance Friday for the U.S. economy.

There's still fear that the U.S. could slip into another recession. Investors will be watching Bernanke's speech at the Fed's annual retreat in Jackson Hole, Wyo., on Friday. It was at the same conference a year ago that Fed Chairman Ben Bernanke made the case for buying Treasury bonds to push interest rates lower and spur spending. That $600 billion bond-buying program was credited with giving stock markets a lift but it ended in June.

The yield on the 10-year Treasury note rose to 2.11 percent from 2.10 percent late Monday. The yield fell below 2 percent last week, its lowest on record, as investors sought refuge from turmoil in the stock market.


Page: 1


 
 
 
 
 
 
 
 
 
 
 





Our Privacy Policy --- About The U.S. Daily News - Contact Us - Advertise With Us - Privacy Guidelines