U.S. Stocks Turn Higher As Insurers Rally
NEW YORK (MarketWatch) -- U.S. stocks erased losses and shot higher Friday as insurer Hartford Financial Services Group Inc. led a rally in the financial sector by hiking its earning forecast for the year.
The reassurances from Hartford helped pull focus from the 553,000 drop in payrolls last month in another bleak illustration of the economy's ongoing unraveling.
"The reality is setting in that this is a deep recession and it's going to result in a very poor employment picture," said Owen Fitzpatrick, head of U.S. equity group at Deutsche Bank.
"Yet, I wouldn't be surprised to see the market come back a bit from where it opens. I do think we're probably getting to the point where we're hitting a bottom," said Fitzpatrick.
Off earlier lows that had it down nearly 300 points, the Dow Jones Industrial Average jumped 183.91 points to 8,560.15.
Twenty-six of the blue-chip index's components climbed into positive turf, led by Citigroup Inc. , up 4.5%.
Boeing Corp. was among the Dow's laggards, its shares dropping in the wake of a report that it could again delay deliveries of its new 787 Dreamliner.
After an earlier rise, shares of General Motors Corp. were down 1.7%, with another day of hearings under way on Capitol Hill on the Big Three automakers' appeal for $34 billion in federal loans.
While the auto industry's woes have a definite impact on the market, the idea that the government may not bail out the Big Three would not be the same "shock to the system" as the September bankruptcy of Lehman Brothers Holdings Inc., said Fitzpatrick.
"If you handed that Lehman Brothers headline to people six months ahead, they would have thought you were crazy. But an automaker bankruptcy would not have shocked people six months ago," said Fitzpatrick.
An ongoing decline in U.S. auto sales means GM will lay off about 2,000 more workers early next year, according to the Associated Press.
The S&P 500 gained 15.15 points to 860.37, with energy, materials and utilities fronting sector losses that included five of the index's 10 industry groups.
Financials fared the best, with Hartford Financial Services Group Inc. among the heavy hitters in the latter sector, its stock up 104.7% after the firm declared its capital position to be strong and hiked its earnings forecast for the year. .
The technology-laden Nasdaq Composite gained 30.82 points to 1,476.38.
Volume on the New York Stock Exchange topped 955 million, and for every three stocks on the rise, two were falling. On the Nasdaq, almost 640 million shares traded, and advancers edged ahead of decliners by a 3-to-2 ratio.
Payrolls plunge
Ahead of the opening bell, the Labor Department said U.S. nonfarm payrolls fell by a bigger-than-expected 533,000 last month, the worst such tally in 34 years, with the unemployment rate rising to 6.7%, the highest since October 1993. .
The added evidence that the economy is mired in recession helped push oil prices lower, with the crude contract for January delivery off $1.46 to $43.75 a barrel.
Treasury prices declined after yo-yoing earlier on, with benchmark 10-year note yields rising 7 basis points to 2.62%, near lows not seen since the 1950s.
The percentage of delinquent mortgage holders soared to a record high in the third quarter, with foreclosures also hitting new highs, according to the Mortgage Bankers Association. .
Silver linings
Brisk sales of whiskey and vodka helped distiller Brown-Forman Corp. avoid the negative impact of the recession, with the maker of Jack Daniel's Tennessee Whiskey lifting its profit target for the year while reporting a bump in second-quarter profit. .
Overseas, the FTSE 100 stumbled 2.4% in London after the jobs data. The Nikkei 225 ended Tokyo trade with a 0.1% slip.
U.S. stocks on Thursday reversed the prior session's gains as jobless claims remained abve a half million and heavyweights including AT&T Inc. and DuPont slashed jobs.
By Kate Gibson