Closing Market Report
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Bleak quarter ends with a gain in stocks
By Tim Paradis
Associated Press
NEW YORK » Wall Street managed a moderate gain in the final session of a dismal first quarter yesterday, but stock prices and the major indexes still ended the first three months of 2008 with massive losses, the casualties of the still continuing credit crisis. The Standard & Poor's 500 index, the benchmark for many widely held investments such as mutual funds, suffered a loss for the quarter of nearly 10 percent.
The blip upward came from a better-than-expected reading in the Chicago Purchasing Managers Index, which is considered a precursor to the Institute for Supply Management's manufacturing survey today. The index rose to 48.2 in March from 44.5 a month earlier; economists had been expecting a reading of 47.3, according to Dow Jones Newswires. Though the number topped forecasts, a figure below 50 nonetheless indicates a contraction in manufacturing activity.
Investors didn't show a strong reaction yesterday to a government plan to overhaul the way Wall Street is regulated. The 218-page plan would give the Federal Reserve increased power to protect the stability of the entire financial system while merging day-to-day supervision of banks into one agency, down from five under the existing system.
Scott Wren, senior equity strategist for A.G. Edwards & Sons, said many investors appeared to be focused on economic data due this week on the manufacturing and service sectors as well as employment. Investors are prepared for weak economic data, he said, but could become unnerved if there is unwelcome corporate news.
"The market is already pricing in a ton of bad economic news. Bad economic news is not going to drive the market. What's going to drive the market is headline news," he said.
On the last day of the quarter, the Dow Jones industrial average rose 46.49, or 0.38 percent, to 12,262.89.
Broader stock indicators also rose. The S&P 500 index advanced 7.48, or 0.57 percent, to 1,322.70, and the Nasdaq composite index rose 17.92, or 0.79 percent, to 2,279.10. The Russell 2000 index of smaller companies rose 4.79, or 0.70 percent, to 687.97.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 4.02 billion shares compared with 3.59 billion shares traded Friday.
The dollar was mixed against other major currencies, while light, sweet crude fell $4.04 to settle at $101.58 on the New York Mercantile Exchange. Gold fell $14.40 to finish at $916.20 an ounce on the Nymex.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.42 percent from 3.45 percent late Friday.
When investors open their quarterly brokerage account or 401(k) statements, what they see will be painful. For the quarter, the Dow fell 7.55 percent, the victim of a series of triple-digit plunges. The S&P 500 declined 9.92 percent, while the Nasdaq, whose smaller company stocks are seen as more vulnerable to economic problems, fell 14.07 percent.
The quarterly performance was the worst since the July-September period of 2002, when the aftermath of the dot-com bust, recession, the 9/11 terror attacks and corporate wrongdoing combined to send stocks spiraling downward.