Stocks stabilize after Tuesday's free fall
NEW YORK » Wall Street rebounded fitfully yesterday from the previous session's 416-point plunge in the Dow industrials as investors took comfort from comments by Federal Reserve Chairman Ben Bernanke but still showed signs of unease about the economy.
Bernanke's remarks to Congress that he still expects moderate economic growth gave some investors confidence to look for bargains. A recovery in some overseas markets following a worldwide selloff Tuesday also lent some support to U.S stocks.
The Fed chairman allayed some of the fears about a slowdown in the U.S. and Chinese economies that fed Tuesday's drop; remarks earlier in the week from former Fed Chairman Alan Greenspan warning that a U.S. recession could take hold later this year contributed to Tuesday's declines.
Investors parsed a series of economic reports out yesterday, hoping to glean a sense of where stocks were headed. Bernanke's comments and a gross domestic product reading that mostly met expectations helped bring out some buyers. Nevertheless, investors remained cautioust.
A recovery in China's Shanghai Composite Index, which had fallen nearly 9 percent Tuesday, also helped boost U.S. stocks, although other Asian markets and European exchanges saw declines of more than 1 percent.
The Dow Jones industrials rose 52.39, or 0.43 percent, to 12,268.63. Broader stock indicators also managed gains.
The Standard & Poor's 500 index climbed 7.78, or 0.56 percent, to 1,406.82, and the Nasdaq composite index rose 8.29, or 0.34 percent, to 2,416.15.
The Russell 2000 index of smaller companies rose 0.64, or 0.08 percent, to 793.30.
Advancing issues outpaced decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to a heavy 3.93 billion.
Tuesday's decline, which was the largest point drop in the Dow industrials in more than five years, made February an unwelcome month for the 30-stock index.
The Dow had its worst monthly percentage drop since April 2005 and the worst monthly point decline since December 2002.
For the S&P, February was the worst percentage and point decline since May. And for Nasdaq, the month marked the worst percentage and point decline since July.
Bonds fell as stocks tried to recoup some losses.
The yield on the benchmark 10-year Treasury note rose to 4.57 percent from its low for the year of 4.47 percent Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude settled up 33 cents to $61.79 per barrel on the New York Mercantile Exchange.