Bargain Hunters Shoot Stocks Up 550

Dow Briefly Drops Below 8,000 Mark Before Staging Massive Rebound

(CBS/AP)  Wall Street launched a massive rebound Thursday, sending the Dow Jones industrial average up nearly 553 points at closing after driving it below the 8,000 mark, as investors decided they did not want to miss out on buying stocks at cheap prices.

The Dow closed around the 8,800 mark; during the day it did not sink below its Oct. 10 trading low of 7,882.51.

After three days of selling that wiped out about $1 trillion in shareholder value, many investors, though nervous about the economy, believed the market had priced in enough bad news. So when the Standard & Poor's 500 index managed to recover from multi-year trading lows, investors swarmed back in.

It's "a herd mentality," said Ryan Larson, senior equity trader at Voyageur Asset Management. "We started going higher - and you don't want to be the last one on the boat."

As stocks rallied, so did oil prices, sending shares of energy companies higher. The biggest gainer among the 30 Dow companies was Chevron Corp., which rose $8.43, or 12.5 percent, to $75.71. Another big gainer was Exxon Mobil Corp., which climbed $6.48, or 9.4 percent, to $75.41; these two energy stocks represented one-fifth of the Dow's point gain Thursday.

The stock market's initial selloff began after the Labor Department reported that the number of newly laid-off individuals seeking unemployment benefits jumped last week to a level not seen since just after the Sept. 11, 2001, terrorist attacks.

And there were more signs of a severe pullback in consumer spending, a troubling trend that had pummeled stocks earlier in the week. Wal-Mart Stores Inc. trimmed expectations for full-year earnings, and Intel Corp. late Wednesday cut more than $1 billion from its sales forecast, providing more evidence that few industries are safe from a clampdown on spending by businesses and consumers alike.

But then the S&P lifted above its Oct. 10 trading lows, and a Treasury auction of 30-year bonds got decent demand from both domestic and foreign buyers, said Arthur Hogan, chief market analyst at Jefferies & Co. The auction results alleviated some fears that the government will have a hard time financing its costly bailout.

Hogan called it a "great sign" that the S&P recovered after falling below its Oct. 10 trading lows. "Historically, if you test a low within 45 days and close above it, it's very bullish," he said.

According to preliminary calculations, the Dow rose 552.59, or 6.67 percent, to 8,835.25, after falling as low as 7,965.42 and rising as high as 8,876.59. That's a trading range of 911 points. The Dow did not sink below its Oct. 10 trading low of 7,882.51.

The Dow's nearly 553-point gain was the third-largest single-session point gain on record, following the 889-point rise on Oct. 28 and the 936-point surge on Oct. 13.

The Standard & Poor's 500 index rose 58.99, or 6.92 percent, to 911.29, after dropping to 818.69 - well below its intraday low of 839.80 on Oct. 10.

The Nasdaq composite index rose 97.49, or 6.50 percent, to 1,596.70.

The Russell 2000 index of smaller companies rose 38.43, or 8.5 percent, to 491.23.

The stock market gained back $700 billion Thursday, after losing about $1 trillion during the first three days of the week, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks. At its lowest trading level Thursday, the market value of the Wilshire index fell below $10 trillion for the first time since April 2003.

Advancing issues outpaced decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.99 billion shares.

The price of a barrel of light, sweet crude rose $2.08 to $58.24 on the New York Mercantile Exchange, after falling to the lowest levels since January 2007.

Government bond prices fell as investors fled back into stocks. The three-month Treasury bill's yield rose to 0.20 percent from 0.13 percent late Wednesday, and the yield on the benchmark 10-year Treasury note rose to 3.88 percent from 3.67 percent late Wednesday. Higher yields indicate lower demand.

Wal-Mart shares rebounded $2.31, or 4.4 percent, to $54.93. The discount retailer's shares had traded lower in earlier trading after it cut its profit outlook because of the flagging global economy and renewed strength of the dollar. Wal-Mart is the only company among the Dow industrials that is up for the year.

Intel also slashed its outlook, initially driving down shares on concerns that consumers are shying away from big purchases like computers. But its shares recovered to trade up 91 cents, or 6.7 percent, to $14.43.

General Motors shares, however, remained weak as the nation's automakers wait for President-elect Obama to push Congress to approve a bailout of the struggling industry. There are also reports that Obama will move to appoint a czar or board to oversee the companies. GM dropped 13 cents, or 4.2 percent, to $2.95. Ford shares rose 6 cents, or 3.3 percent, to $1.90.

The dollar was mixed against other major currencies. Gold prices rose.

Overseas, Japan's Nikkei closed down 5.25 percent and Hong Kong Hang Seng fell 5.15 percent. In European trading, London's FTSE 100 was down 0.31 percent, Germany's DAX rose 0.62 percent, and France's CAC-40 added 1.10 percent.

[rhs648]

rhs648: It''s great that you are able to take advantage of the market downturn. My point was that unfortunately the downturn makes it difficult for a lot of people to make ends meet and pay off debts, let alone set aside money for long-term investments.

Posted by incog-nito

This is something we can agree on.

[incog-nito]

rhs648: It''s great that you are able to take advantage of the market downturn. My point was that unfortunately the downturn makes it difficult for a lot of people to make ends meet and pay off debts, let alone set aside money for long-term investments.

[skeezix06]

The market is unstable and doesn''t appear to have any basis in reality. If you can afford to lose, go ahead and lose it. Otherwise, I suggest you find somewhere else to keep your money.

[rhs648]

The low prices in the stock market may not be repeated for 5, 10, 15, or 20 years once the economy improves. Why not take advantage of the sale prices.

Posted by rhs648 at 10:53 PM : Nov 13, 2008

Sure, why not? I''''m sure a lot of people have a few $100K lying around they can put in the market for 10, 20 years. Especially when their 401K account has been halved and their mortgage is upside down.

Posted by incog-nito

Hi incog-nito. Money can be made in any economy. No matter how bad the economy is, there are people posistioned to make money. As the prices of homes fall, there are people who will buy homes and get them at bargain prices. The same is true of the stock market. I have been purchasing stock repeatedly as the stock prices have fallen in recent months. For some people, this is a great opportunity. If the prices of new cars started tumbling, there are many people who would run out and purchase cars at the lower prices. Again, there are opportunities in any economy.

[rhs648]

Wow ! Can''''t get enough of all this free investment advice from the blog-o-sphere.... everyone''''s an expert, after the fact.

Posted by ho

The best thing any of us can do is to learn from the experiences of other people, especially successful people. They have a lot to offer.

[sgarrod1]

Posted by whatithink10 at 06:34 PM : Nov 13, 2008-------Personal ambition creates wealth, not socialist tyranny of any kind,.....especially economic.

Let me see if I have this right: it is the greed (sorry, "personal ambition") of those misguided Scandinavians like the Norwegians and the Danes that enables them to enjoy the highest standard of living AND quality of life in the western world despite the active role of the governments they elect in their economies, right?

[incog-nito]

The low prices in the stock market may not be repeated for 5, 10, 15, or 20 years once the economy improves. Why not take advantage of the sale prices.

Posted by rhs648 at 10:53 PM : Nov 13, 2008

Sure, why not? I''m sure a lot of people have a few $100K lying around they can put in the market for 10, 20 years. Especially when their 401K account has been halved and their mortgage is upside down.

[whitemale08]

Junkyard dog Sean Hannity stupidly claimed yesterday that we are in a recession because of Obama when Obama hasn''t even been sworn in yet.

However if that''s true then today junkyard dog Sean Hannity would have to give credit to Obama for the Obama rally of 552 points in the stock market.

So which is it?

[hotwitch]

Wow ! Can''t get enough of all this free investment advice from the blog-o-sphere.... everyone''s an expert, after the fact.

[rhs648]

The salvation of the housing market will be people buying homes at attractive prices. There are many people ready to jump into the housing market when they feel homes are selling at bargain prices. Sure, you need good credit and a down payment. The three homes I purchased over the years all required good credit, a down payment, and settlement costs. It is only in recent years thast we saw no down payment loans, interest only loans, adjustable rate loans, and no outlay for settlement costs. When people don''t have anything vested in their homes, it is easy to walk away from them. If a person chances losing a $20,000 down payment by defaulting, they are less likely tp walk away from a home. Again, the excess inventory of homes will dwindle as bargain seeking people jump back into the housing market

[rhs648]

Most people like a sale. The best thing successful investors have going for them is investor pyschology. When the market is down, panick selling sets in. When the market is going up, people jump into the market. When this happens, many investors are already on their way to the bank with their profits. It is difficult for many people to invest when the markets are down. Somehow, these people seem to feel the economy and the markets will never rebound. History has repeatedly shown that the economy rebounds from recession. The low prices in the stock market may not be repeated for 5, 10, 15, or 20 years once the economy improves. Why not take advantage of the sale prices.

[sgarrod1]

Posted by whatithink10 at 06:34 PM : Nov 13, 2008-------Personal ambition creates wealth, not socialist tyranny of any kind,.....especially economic.

Let me see if I have this right: it is the greed (sorry, "personal ambition") of those misguided Scandinavians like the Norwegians and the Danes that enables them to enjoy the highest standard of living AND quality of life in the western world despite the active role of the governments they elect in their economies, right?

[mikezembill]

My god my banker thinks i am selling drugs do not think i could make this kind of money selling drugs.

[sgarrod1]

Posted by whatithink10 at 06:34 PM : Nov 13, 2008-------Personal ambition creates wealth, not socialist tyranny of any kind,.....especially economic.

Let me see if I have this right: it is the greed (sorry, "personal ambition") of those misguided Scandinavians like the Norwegians and the Danes that enables them to enjoy the highest standard of living AND quality of life in the western world despite the active role of the governments they elect in their economies, right?

[sgarrod1]

Posted by whatithink10 at 06:34 PM : Nov 13, 2008-------Personal ambition creates wealth, not socialist tyranny of any kind,.....especially economic.

Let me see if I have this right: it is the greed (sorry, "personal ambition") of those misguided Scandinavians like the Norwegians and the Danes that enables them to enjoy the highest standard of living AND quality of life in the western world despite the active role of the governments they elect in their economies, right?

[mikezembill]

SINGINRICH DONT YOU JUST LOVE THIS MAKING ALL THIS MONEY ON THE SHORT SELL I AM MAKING MORE MONEY THAN EVER I LOVE IT JUST LOVE IT.

[sgarrod1]

Posted by whatithink10 at 06:34 PM : Nov 13, 2008-------Personal ambition creates wealth, not socialist tyranny of any kind,.....especially economic.

Let me see if I have this right: it is the greed (sorry, "personal ambition") of those misguided Scandinavians like the Norwegians and the Danes that enables them to enjoy the highest standard of living AND quality of life in the western world despite the active role of the governments they elect in their economies, right?

[donevis-2009]

Bargain hunters... bull... 900 pt fluctuations are cause by manipulators using sophisticated computer algorithms... the ordinary investor does not cause shifts of this magnitude.. these manipulators need to be regulated.

Posted by rlenham at 07:48 PM : Nov 13, 2008

Finally a post that makes some sense. Thanks for stating the obvious as most posting here seem to be blind to the dark side of this situation. Ride the wave my A$$, this whole thing is out of a bad novel and I''m afraid of the last chapter. Hang on people we''re ready to start the E ride. "God Speed USA"

[sgarrod1]

Posted by whatithink10 at 06:34 PM : Nov 13, 2008-------Personal ambition creates wealth, not socialist tyranny of any kind,.....especially economic.

Let me see if I have this right: it is the greed (sorry, "personal ambition") of those misguided Scandinavians like the Norwegians and the Danes that enables them to enjoy the highest standard of living AND quality of life in the western world despite the active role of the governments they elect in their economies, right?

[mikezembill]

I LOVE TO SHORT SELL