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Stocks struggle
to recoverThe Dow recoups 60 points while
Associated Press
the Nasdaq jumps 49 after an
early day selloffNEW YORK -- Stocks finished a turbulent session mostly higher today after the Federal Reserve's latest report on the economy reassured nervous investors following yesterday's selloff.
The Dow Jones industrial average rose 60.50 to close at 9,856.53, recovering some of the 374 points it lost yesterday. The Nasdaq composite index, which had tumbled as much as 125 points in early trading today, finished up 49.33 at 4,897.17
Broader stock indicators were also higher, with the Standard & Poor's 500 climbing 11.08 to 1,366.70. But declining issues outnumbered advancers by a 10-to-9 margin on the New York Stock Exchange, with 1,532 down, 1,431 up and 477 unchanged. Decliners also beat advancers on the Nasdaq stock market. NYSE volume totaled 1.2 billion shares vs. 1.3 billion yesterday.
The NYSE composite rose 2.66 percent to 591.23; the American Stock Exchange composite fell 15.54 to 1,001.40; and the Russell 2000 index of smaller companies fell 0.79 to 594.68.
The 30-year Treasury bond price fell 6/32, or $1.87 per $1,000 face amount; its yield rose 2 basis points to 6.16 percent. (See story, page B-3.)
Stocks rose after Fed economists released its "beige book" survey of economic conditions, which indicated that while workers' wages are rising, there is little evidence of inflation in the overall economy.
The report, which central bankers will consider when they meet March 21 to discuss their interest rate policy, calmed investors' fears that rates are headed sharply higher. The Fed has raised rates four times since last June, and Chairman Alan Greenspan has made no secret of his willingness to raise rates further to slow the economy.
The Fed's report today stabilized what had been a turbulent market in the wake of yesterday's steep selloff, when the Dow fell 374 points.
Procter & Gamble, the catalyst for yesterday's selloff, remained out of favor today. The stock, which fell more than 30 percent yesterday, lost another $3.19, or about 5 percent, to end today at $57.81.
The company's profit warning hung over the broader market as investors worried that other companies' earnings would suffer as well. But some analysts said investors appeared to believe that the blue chips had paid too great a price for Procter & Gamble's warning.
"There was no sense to the magnitude of the selloff," said Brian G. Belski, chief investment strategist at George K. Baum & Co. in Kansas City, Mo. "It was an overreaction that has really created some good buying opportunities."
"Some beaten-up sectors of the market are finally getting some attention," said Francis Gannon, senior vice president and portfolio manager at SunAmerica Asset Management in New York.
Johnson & Johnson led the Dow higher, and Merck rose. Drug stocks outside the Dow were higher, too, with Bristol Myers Squibb soaring.
"The average drug and health-care stock is trading 29 percent below its 52-week high, and there are opportunities within the group,' said David Sowerby, a money manager in Bloomfield Hills, Mich., with Loomis, Sayles & Co., which oversees $65 billion.
The Nasdaq's performance was mixed as investors continued taking profits from some of the stocks that propelled the index above 5,000 for a brief time on Tuesday. Technology high-flyers like JDS Uniphase and Applied Materials were down.
But buyers stepped in by midafternoon to pick up some high-tech favorites. Oracle and Microsoft rose.
Oracle, the world's largest database software maker, announced it will form an online supply exchange for the convenience store industry with Chevron Corp., the second-largest U.S. oil company, and Wal-Mart Stores Inc.'s McLane Co. unit.