Stocks climb amid signs of recovery
NEW YORK » Wall Street extended its recovery from last week's big plunge, rising Thursday after several stable sessions helped buttress investor sentiment and allay some concerns about the economy.
Yesterday's advance helped investors speed past lackluster retail sales figures and focus on more promising comments about March sales. Investors also grew more confident following gains in markets in Europe and Asia.
The dollar was mixed against major currencies and fought its way higher against the yen, easing some concern about whether global liquidity would tighten.
Investors eager for signals about the health of the economy bet on rising fortunes for U.S. businesses a day ahead of the U.S. Labor Department's much-anticipated February employment report.
Strong employment is seen as crucial on Wall Street because robust consumer spending has kept the economy charging ahead in recent years. Larger concerns about the economy figured heavily in last week's selloff.
"I think we got a little bit too negative too fast," said Brian Levitt, corporate economist at OppenheimerFunds Inc., referring to the Feb. 27 global selloff that sent the major U.S. indexes down more than 3 percent. "They failed to see the broader picture that there still is fairly good underlying strength in the economy."
The Dow Jones industrials were up more than 100 points in afternoon trading before pulling back amid rumors a subprime lender would declare bankruptcy. The Dow closed up 68.25, or 0.56 percent, at 12,260.70.
Lender New Century Financial Corp. announced after the markets closed that it would no longer be accepting loan applications, and that it secured $265 million in financing to help it meet financial obligations. The market is highly sensitive to news about mortgage problems; concerns about subprime lenders and mortgage defaults contributed to last week's decline.
"This is one of the fears that has kind of been overhanging the market," said Larry Peruzzi, a trader at the Boston Company Asset Management.
Broader stock indicators also put up sizable gains yesterday. The Standard & Poor's 500 index climbed 9.92, or 0.71 percent, to 1,401.89, and the Nasdaq composite index advanced 13.09, or 0.55 percent, to 2,387.73.
The Russell 2000 index of smaller companies rose 5.24, or 0.68 percent, to 781.14.
Advancing issues outnumbered decliners by 3 to 1 on the New York Stock Exchange, where consolidated volume came to 2.96 billion shares, compared to 3.36 billion shares Wednesday.
Bonds fell as stocks advanced; the yield on the benchmark 10-year Treasury note rose to 4.51 percent from 4.50 percent late Wednesday. Gold prices rose.
Light, sweet crude fell 18 cents to $61.64 per barrel on the New York Mercantile Exchange.
The focus on broader market sentiment and the impending February employment report overshadowed word from the Labor Department that the number of newly laid-off workers seeking unemployment benefits fell last week to the lowest level in a month.