U.S. Stocks Open Slightly Up In Rebounding From Heavy Losses
NEW YORK (MarketWatch) - U.S. stocks opened slightly ahead Wednesday, bouncing back from the market's largest plunge in nearly a year, after the government said productivity grew more than expected and Walt Disney Co.'s earnings surpassed estimates.
The Dow Jones Industrial Average rose 10.5 points to 12,275.6, led by Walt Disney , up 4.3%, after it reported first-quarter profits fell 27% from the year-ago quarter, but the results still topped expectations.
The S&P 500 gained 1.15 points to 1,337.79 and the Nasdaq Composite climbed 0.47 points to 2,310.04
Ahead of the opening bell, the Labor Department estimated productivity growth in the non-farm business sector slowed to a 1.8% annual rate in the fourth quarter from 6% in the third. .
Stocks plunged Tuesday, with the Dow industrials tumbling to their biggest drop in 11 months, after a key service sector gauge contracted in January, signaling a possible U.S. recession.
Concerns about the U.S. economy fueled heavy losses in Asia. .
In Europe, however, stocks battled back into the black. .
In early action on the New York Mercantile Exchange, gold futures rose sharply to trade above $900 an ounce, with gold for April delivery recently up $12 at $902.3 an ounce. .
Elsewhere on the NYME, crude-oil futures held steady near $88 a barrel, with crude for March delivery up 14 cents at $88.55 a barrel. .
In a speech Tuesday, Richmond Federal Reverse President Jeffrey Lacker became the first Fed official to say publicly that the economy faces the risk of a recession.
Toll Brothers , the home builder, on Wednesday didn't provide much optimism on its way to reporting a 22% fall in home-building revenue.
"The housing market remains very weak in most areas. Based on current traffic and deposits, we are not yet seeing much light at the end of the tunnel," said Robert I. Toll, chairman and chief executive.
Lacker is due to make another speech, and will be joined by Fed Governor Randall Kroszner and Philly Fed President Charles Plosser. Fed Chairman Ben Bernanke is due to hold a private meeting with Senate Banking Committee Chairman Chris Dodd, D.-Conn.
Another media giant, Time Warner , met estimates after reporting a 41% profit fall.
General Motors was downgraded to underperform and Ford Motor Co. was slashed to peer perform at Bear Stearns, which cited worries over consumers' ability to buy cars and trucks.
BHP Billiton increased its all-stock offer for Rio Tinto to $147 billion, in its first major move since Aluminum Corp. of China and Alcoa bought a big stake in Rio Tinto.
Diageo removed itself from the battle to land Absolut after striking a $900 million deal to buy a stake in vodka maker Ketel One.
By Kate Gibson