Bargain hunters help stocks bounce back
NEW YORK » Wall Street finished a back-and-forth session sharply higher yesterday as investors sought bargains while also contending with concerns about the strength of the economy and upcoming corporate results.
The Nasdaq composite index showed its first gain in nine sessions and the Dow Jones industrial average gained more 200 points in the final 90 minutes of the session to finish nearly 150 points higher.
The gains at the end of a fractious session came ahead of a fourth-quarter report from Alcoa Inc., which marked the unofficial start of earnings season.
Yesterday's session was as choppy as Tuesday's, when stocks tumbled amid concerns about the economy.
A prediction of a recession in 2008 by Wall Street's biggest investment bank at times appeared to weigh on investors. Goldman Sachs said it expects fallout from the housing slump and recent tightness in the credit markets will spread to the broader economy this year.
Countrywide Financial Corp. may have added to the seesaw trading, saying yesterday that the delinquency and foreclosure rate of home loans in its portfolio surged in December.
The stock in the nation's largest mortgage lender had fallen sharply Tuesday amid bankruptcy rumors that the company said were baseless.
Countrywide fell 35 cents, or 6.4 percent, to $5.12.
The up-and-down days on Wall Street are likely to continue as investors grapple with their concerns about the economy, according to Thomas Nyheim, vice president and portfolio manager at Christiana Bank & Trust Co.
The Dow rose 146.24, or 1.16 percent, to 12,735.31.
Broader stock indicators also rebounded.
The Standard & Poor's 500 index rose 18.94, or 1.36 percent, to 1,409.13, and the Nasdaq composite index, which had been down more than 1 percent during the session, finished up 34.04, or 1.39 percent, at 2,474.55.
The Russell 2000 index of smaller companies rose 7.26, or 1.03 percent, to 712.12.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 2.06 billion shares compared with 1.84 billion shares traded Tuesday.
Bond prices rose yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.84 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 72 cents to $95.61 a barrel on the New York Mercantile Exchange after a government report showed domestic inventories declined last week.
Alcoa reported after the closing bell that its fourth-quarter profit rose to $632 million, or 75 cents per share, from $359 million, or 41 cents a share, a year earlier.
Wall Street had been hoping the results would help indicate how well the economy was holding up.
Alcoa, one of the 30 stocks that comprise the Dow industrials, finished up 25 cents to $31.25 and rose to $31.94 in after-hours trading.