Wall Street advances late in turbulent day
NEW YORK » Wall Street shot higher in a last-minute advance yesterday after careening through a session made turbulent by ongoing concerns about U.S. home loans and the credit market.
Stocks zigzagged for much of the day, with the Dow Jones industrials moving from positive to negative territory and back again before rallying to a gain of 150 points on bargain hunting during the last 20 minutes of trading. It was clear that any advance could be punctured by further bad news about soured subprime home loans, those made to borrowers with poor credit.
"We've got a tug-of-war going on," said Arthur Hogan, chief market analyst at Jefferies & Co. He contends yesterday's trading represents a microcosm of the market's performance in recent weeks, when investors alternately focus on concerns like subprime loans and rising energy prices and positives like low unemployment, low interest rates and still-growing corporate profits.
The Dow rose 150.38, or 1.14 percent, to 13,362.37.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 10.54, or 0.72 percent, to 1,465.81, and the Nasdaq composite index rose 7.60, or 0.30 percent, to 2,553.87.
The Russell 2000 index of smaller companies rose 1.80, or 0.23 percent, to 777.92.
Bond prices, which move opposite yields, fell as stocks rallied. The yield on the benchmark 10-year Treasury note rose to 4.79 percent from 4.75 percent late Tuesday.
Besides the weak home loan market and credit worries, investors are facing concerns over the threat of inflation due to record-high crude oil prices.
Light, sweet crude fell $1.68 to $76.53 per barrel on the New York Mercantile Exchange after rising to a new all-time high of $78.77 during the session after the government reported a drop in inventories.
The dollar was mixed against other major currencies, while gold prices fell.
Declining issues outnumbered advancers by more than 9-to-7 on the New York Stock Exchange, where consolidated volume came to a heavy 4.93 billion shares compared with 4.18 billion traded Tuesday.
Among the forces weighing on stocks was another slump in financial services stocks, especially after Bear Stearns Cos. said it moved late Tuesday to prevent investors from pulling money out of a third hedge fund, which had $850 million invested in highly rated mortgage-backed securities.
In economic news, a report from the National Association of Realtors found that pending sales of existing homes rose 5 percent in June from a month earlier.
In corporate news, Dow Jones & Co., publisher of the Wall Street Journal, confirmed it struck a deal to be acquired by Rupert Murdoch's media conglomerate News Corp. for $5 billion. Dow Jones rose 72 cents to $58.10, while News Corp. rose 16 cents to $22.82.
Time Warner Inc. saw strength in its cable TV business help boost second-quarter earnings by 5 percent. However, investors grew concerned after its AOL Internet unit saw a 38 percent decline in revenue. Time Warner fell 62 cents, or 3.2 percent, to $18.64.
Arcelor Mittal, the world's largest steelmaker, posted a $2.72 billion profit in the second quarter. The stock rose $4.29, or 7 percent, to $65.31.