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Wall Street pulls out of tailspin, sees modest gains
NEW YORK
Petroleumworld.com, Mar 14, 2008
US stocks emerged from an early slide to post modest gains Thursday as the market was able to shake off jitters about fresh financial market turmoil and surging commodities prices.
The Dow Jones Industrial Average, which had dropped more than 200 points in early trade amid a heavy global selloff, saw a robust rebound and closed up 35.50 points (0.29 percent) at 12,145.74.
The other main indexes also rebounded sharply. The Nasdaq composite rose 19.74 points (0.88 percent) to 2,263.61 and the broad-market Standard & Poor's 500 index added 6.71 points (0.51 percent) to 1,315.48.
Stocks got off to a weak start as investor sentiment was hammered by resurgent credit concerns, the declining dollar and record high oil prices, dealers said.
Global financial markets shuddered after Carlyle Capital Corporation, backed by US private equity giant Carlyle Group, said it expected its creditors to seize its remaining assets after defaulting on its debt of nearly 17 billion dollars.
But Wall Street perked up later as investor confidence appeared to return.
"It's impressive market action," said Andy Brooks, head of trading at T Rowe Price.
"We continue to fight through the credit issues and the great wall of worry that's out there."
Analysts at Briefing.com said, "There does not appear to be one specific catalyst for the recent surge, although the thrifts and mortgages group saw a huge lift after being down as much as 5.6 percent."
Still, the economic and corporate news was generally grim.
A US government report on retail sales fell 0.6 percent in February, more sharply than expected and raised alarms about consumer spending, the main driver of the economy.
The "very dismal retail sales number ... puts us closer to at least one quarter of negative growth," said Peter Cardillo, an analyst at Avalon Partners.
Oil futures rose to as high as 111 dollars a barrel in New York as the dollar touched fresh lows. The surge in record-breaking oil prices above 100 dollars a barrel is triggering inflationary pressures that could squeeze the Federal Reserve's room for maneuver in cutting interest rates to stimulate sluggish growth, analysts said.
Brooks said battered investor sentiment appeared to slowly improving."We're working through (the problems) so its good to see people feeling better," he said. "But we're on a roller-coaster and this isn't going to end overnight."
Bonds fell. The yield on the 10-year US Treasury bond rose to 3.534 percent from 3.483 percent Wednesday and that on the 30-year bond increased to 4.454 percent against 4.410 percent. Bond yields and prices move in opposite directions.
Story from AFP
AFP 13 2025 GMT 03 08Copyright© 2008 respective author or news agency. All rights reserved.
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