Stocks Make Late Surge, Close Up 125 Points
Glass of cola / iStockphoto
Updated at 4:22 p.m. EDT
Stocks have ended sharply higher a day after posting their biggest drops in more than a year.
Trading was volatile Friday and there are still worries about how Europe is handling its debt crisis. Analysts said a bounce back after the slide Thursday wasn't surprising.
The Dow Jones industrials are up 125 at 10,193 after briefly dropping below 10,000 in morning trading.
The Standard & Poor's 500 index is up 16 at 1,087. The Nasdaq composite index is up 25 at 2,229.
More than three stocks rose for every one that fell on New York Stock Exchange. Volume totaled 2.3 billion shares compared with 2.1 billion Thursday.
The volatility comes after major indexes entered "correction" mode, having dropped more than 10 percent from their 2010 highs set last month.
CBS' MoneyWatch.com: Stock Correction Is Here
Investors again looked to Europe for direction. The German parliament approved the country's share of a $1 trillion plan to help contain debt problems in the European Union. Major stock indexes in Europe were mixed but pulled well off their lows. Traders have been worried that stronger countries like Germany and France will be saddled with heavy debts to help weaker EU countries.
The euro rose to $1.2591 from $1.2464. The 16-nation currency has been a big driver of trading for weeks but many traders have been skeptical that any advances will be short-lived.
World markets have been falling on concerns that European debt problems will slow or maybe even stop a global rebound. The fear is that huge deficits in countries including Greece and Portugal will cause a wave of bad debt to race through the world's financial system. Even if that is prevented, the prospect of heavier borrowing and sluggish growth has traders concerned.
It's impossible to know whether the market is in for more than a correction but analysts say that the fear hasn't turned to panic like it did during the market's slide in late 2008 and early 2009.
"The likelihood of a double dip here is, I think, being really exaggerated," said Stu Schweitzer, global markets strategist at J.P. Morgan's Private Bank in New York, referring to the prospect of another recession.
Schweitzer also expects the market will stabilize.
"It's a very tough call to make, but I come down on the side that it's more likely to be a correction," he said.
In late afternoon trading, the Dow rose 16.93, or 0.2 percent, to 10,084.94. The broader Standard & Poor's 500 index rose 3.63, or 0.3 percent, to 1,075.22. The Nasdaq composite index rose 6.49, or 0.3 percent, to 2,210.50.
The Dow had last fallen below 10,000 on May 6 when it lost nearly 1,000 points in an afternoon rout that was the biggest ever intraday slide. Regulators have said they are still unclear on what caused the brief drop.
The Dow tumbled 376 points Thursday. The Dow and the S&P 500 index fell more than 3 percent, while the Nasdaq lost 4.1 percent. The drop has erased the gains major indexes had made in 2010.
Bond prices were mixed after surging Thursday when investors dumped anything seen as risky, including stocks and commodities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.21 percent from 3.22 percent late Thursday.
Crude oil dropped 96 cents to $69.84 per barrel on the New York Mercantile Exchange.
The Chicago Board Options Exchange's Volatility Index fell 11 percent. The VIX, which is known as the market's fear gauge, closed Thursday at its highest level since March 2009. The jump signaled that traders were bracing for more drops in the market.
Even with the drop of 12 percent from its 2010 high, the S&P 500 index is still up 58 percent from the March 2009 bottom and is down 31.5 percent from its record close of 1,565 in October 2007.
Corrections can be scary but they can be good for markets. Analysts say major stock indexes had become overheated in their climb from a 12-year low in March 2009. Corrections also aren't unusual. Drops of 10 percent occur in most years and don't necessarily that stocks will keep sliding.
"We don't think there is any predictability that just because we've had a 10 percent correction now that suddenly we're in for another 10 percent drop," said Bill Urban, principal with Bingham, Osborn & Scarborough, based in San Francisco.
Financial stocks also drew attention. The Senate late Thursday approved its version of a financial overhaul bill that contains the biggest regulatory changes for banks since the 1930s. The bill will now be reconciled with a version that passed the House.
Goldman Sachs Group Inc. rose $4.32, or 3.2 percent, to $140.42, while Wells Fargo & Co. rose 83 cents, or 2.9 percent, to $29.52.
The Treasury Department said after the slide in world markets Thursday that Treasury Secretary Timothy Geithner would head to Europe next week to meet with finance officials in Britain and Germany on how to boost confidence in the financial system.
Britain's FTSE 100 fell 0.9 percent and briefly dropped below the psychological threshold of 5,000. Germany's DAX index slid 1.6 percent, and France's CAC-40 fell 0.7 percent. Japan's Nikkei stock average fell 2.5 percent.
In corporate news, Dell Inc. reported after the closing bell Thursday that its first-quarter net income increased but the company's gross profit margin fell from a year earlier. The stock fell 99 cents, or 6.9 percent, to $13.33.
Gap Inc. reported a 40 percent increase in first-quarter net income. The company boosted its profit forecast for the year but the outlook fell short of analysts' forecasts. Gap rose 29 cents, or 1.3 percent, to $22.03.
CBS/AP Stocks have ended sharply higher a day after posting their biggest drops in more than a year.
Trading was volatile Friday and there are still worries about how Europe is handling its debt crisis. Analysts said a bounce back after the slide Thursday wasn't surprising.
The Dow Jones industrials are up 125 at 10,193 after briefly dropping below 10,000 in morning trading.
The Standard & Poor's 500 index is up 16 at 1,087. The Nasdaq composite index is up 25 at 2,229.
More than three stocks rose for every one that fell on New York Stock Exchange. Volume totaled 2.3 billion shares compared with 2.1 billion Thursday.
The volatility comes after major indexes entered "correction" mode, having dropped more than 10 percent from their 2010 highs set last month.
CBS' MoneyWatch.com: Stock Correction Is Here
Investors again looked to Europe for direction. The German parliament approved the country's share of a $1 trillion plan to help contain debt problems in the European Union. Major stock indexes in Europe were mixed but pulled well off their lows. Traders have been worried that stronger countries like Germany and France will be saddled with heavy debts to help weaker EU countries.
The euro rose to $1.2591 from $1.2464. The 16-nation currency has been a big driver of trading for weeks but many traders have been skeptical that any advances will be short-lived.
World markets have been falling on concerns that European debt problems will slow or maybe even stop a global rebound. The fear is that huge deficits in countries including Greece and Portugal will cause a wave of bad debt to race through the world's financial system. Even if that is prevented, the prospect of heavier borrowing and sluggish growth has traders concerned.
It's impossible to know whether the market is in for more than a correction but analysts say that the fear hasn't turned to panic like it did during the market's slide in late 2008 and early 2009.
"The likelihood of a double dip here is, I think, being really exaggerated," said Stu Schweitzer, global markets strategist at J.P. Morgan's Private Bank in New York, referring to the prospect of another recession.
Schweitzer also expects the market will stabilize.
"It's a very tough call to make, but I come down on the side that it's more likely to be a correction," he said.
In late afternoon trading, the Dow rose 16.93, or 0.2 percent, to 10,084.94. The broader Standard & Poor's 500 index rose 3.63, or 0.3 percent, to 1,075.22. The Nasdaq composite index rose 6.49, or 0.3 percent, to 2,210.50.
The Dow had last fallen below 10,000 on May 6 when it lost nearly 1,000 points in an afternoon rout that was the biggest ever intraday slide. Regulators have said they are still unclear on what caused the brief drop.
The Dow tumbled 376 points Thursday. The Dow and the S&P 500 index fell more than 3 percent, while the Nasdaq lost 4.1 percent. The drop has erased the gains major indexes had made in 2010.
Bond prices were mixed after surging Thursday when investors dumped anything seen as risky, including stocks and commodities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.21 percent from 3.22 percent late Thursday.
Crude oil dropped 96 cents to $69.84 per barrel on the New York Mercantile Exchange.
The Chicago Board Options Exchange's Volatility Index fell 11 percent. The VIX, which is known as the market's fear gauge, closed Thursday at its highest level since March 2009. The jump signaled that traders were bracing for more drops in the market.
Even with the drop of 12 percent from its 2010 high, the S&P 500 index is still up 58 percent from the March 2009 bottom and is down 31.5 percent from its record close of 1,565 in October 2007.
Corrections can be scary but they can be good for markets. Analysts say major stock indexes had become overheated in their climb from a 12-year low in March 2009. Corrections also aren't unusual. Drops of 10 percent occur in most years and don't necessarily that stocks will keep sliding.
"We don't think there is any predictability that just because we've had a 10 percent correction now that suddenly we're in for another 10 percent drop," said Bill Urban, principal with Bingham, Osborn & Scarborough, based in San Francisco.
Financial stocks also drew attention. The Senate late Thursday approved its version of a financial overhaul bill that contains the biggest regulatory changes for banks since the 1930s. The bill will now be reconciled with a version that passed the House.
Goldman Sachs Group Inc. rose $4.32, or 3.2 percent, to $140.42, while Wells Fargo & Co. rose 83 cents, or 2.9 percent, to $29.52.
The Treasury Department said after the slide in world markets Thursday that Treasury Secretary Timothy Geithner would head to Europe next week to meet with finance officials in Britain and Germany on how to boost confidence in the financial system.
Britain's FTSE 100 fell 0.9 percent and briefly dropped below the psychological threshold of 5,000. Germany's DAX index slid 1.6 percent, and France's CAC-40 fell 0.7 percent. Japan's Nikkei stock average fell 2.5 percent.
In corporate news, Dell Inc. reported after the closing bell Thursday that its first-quarter net income increased but the company's gross profit margin fell from a year earlier. The stock fell 99 cents, or 6.9 percent, to $13.33.
Gap Inc. reported a 40 percent increase in first-quarter net income. The company boosted its profit forecast for the year but the outlook fell short of analysts' forecasts. Gap rose 29 cents, or 1.3 percent, to $22.03.
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Over the last month, we have all learned another important lesson, the price of gasoline has no relationship to the price of oil.
Is this true for the stock market as well?
.
Asia Times - May 22, 2010: -HONG KONG - Hon Hai Group, which should be celebrating a 35% surge in first-quarter profit from making electronics products such as computers for Hewlett Packard and iPhones for Apple, is instead calling in monks and counselors in an attempt to halt a growing number of suicides among its 800,000-strong Chinese workforce.
.
So far with little success. A 21-year-old man jumped to his death early on Friday at the Shenzhen operations of Foxconn Technology Group, a Hon Hai affiliate. The fatal jump brought to eight the number of suicides over the past five months at Foxconn's operations in Shenzhen, the fast-growing metropolis and manufacturing hub adjoining Hong Kong
You like sugar beets and their potential for alternative fuel?
Start a company. Take it public. Attract investors with your business plan and philosophy. Use their money to grow your business. If you are successful, so are your investors who took the risk. Wall Street brokers those transactions. Yes, there are unscrupulous individuals/companies as there are everywhere - from roofers to auto mechanics to cell phone providers. So, I'm not quite clear on this "lie" you are referring to.
If they are really scared they probably invest in a toilet paper company like Kimberly Clarke, or a Campbell's Soup.
"Clearly people who are against Wall Street don't understand markets and investing. Apparently, everyone on these posts believes a market is and should only be up-only."
Agreed 100% The majority of posts regarding the market anytime prove that most folks don't know how to manage their own accounts, believe that the market is always up (and for some of a certain age, they don't know what a down market is) Many simply hand over money to a broker and wait for the money to come in.
Plenty of folks have not figured out that markets fluctuate, sometimes wildly.
I've been investing for 41 years, my gains far outweigh my losses. I don't use a broker, never have and won't. The last couple of years have been a buyers paradise with good stocks at bargin basement prices and good gain.
If you don't have the time and can't figure it yourself, then ask a lot of questions up front.
I've said it before The market is not for the faint of heart.