Star-Bulletin news services
Stocks rebound after
three days of selling
NEW YORK >> Wall Street stumbled through an uneven session and closed mixed today after Federal Reserve Chairman Alan Greenspan said he is unable to make a firm judgment about the health of the economy.
In testimony before Congress, Greenspan said economic signals remain mixed; his comments increased investors' fears about the economic recovery and sent stocks falling. But prices recovered as investors decided to take advantage of lower prices following three days of selling. Investors were also cautious following yesterday's reports of mad cow disease in Canada and by the U.S. government raising the national terror alert level to "orange," indicating a high risk for attacks.
Advancing issues outnumbered decliners 4 to 3 on the NYSE. Volume was light.
Shaking off an early loss of 60.15, the Dow Jones industrial average closed up 25.07, or 0.3 percent, at 8,516.43. It was the Dow's first gain in four sessions, wiping out only part of a three-day loss of 221.78 points.
The broader market was mostly higher. The Standard & Poor's 500 index rose 3.69, or 0.4 percent, to 923.42. The Russell 2000 index rose 1.70, or 0.4 percent, to 410.73. But, in its fourth straight decline, the Nasdaq composite index dipped 1.22, or 0.1 percent, to 1,489.87.
The price of the Treasury's 10-year note closed down 5/16 point, while its yield rose to 3.39 percent from 3.36 percent yesterday. Two-year Treasury notes were down 5/32 point and yielded 1.35 percent, up from 1.26 percent yesterday.
Investors have been collecting profits in recent sessions from the market's huge earnings-driven rally. They are concerned that stocks have become too pricey too soon and that a weakening dollar will further limit foreign investment.
Still, analysts are encouraged by signs of resilience in the market, including how most of Wall Street reversed earlier declines today. Selling has also been moderate aside from Monday's 185-point drop in the Dow. Yesterday, amid upsetting news about mad cow disease and a greater risk of terrorism, the stock indexes posted extremely small losses and more stocks rose than fell on the New York Stock Exchange.
"The strength in the market is still there. We are looking at a market that still wants to go higher," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.
Among today's winners, McDonald's rose 35 cents to $17.30, recouping some of the $1.21 it lost yesterday on fears of mad cow disease. Lehman Brothers also upgraded the company to "overweight" from "equal-weight," downplaying the severity of a situation in Canada, where officials said a cow was diagnosed with mad cow disease.
Hewlett-Packard rose 89 cents to $17.94, having reported earnings late yesterday that beat analysts' expectations by 2 cents a share and confirmed Wall Street's estimates for the rest of the year.
Overseas, Japan's Nikkei stock average finished down 0.5 percent. In Europe, France's CAC-40 inched up 0.1 percent, while Britain's FTSE 100 fell 0.9 percent and Germany's DAX index lost 0.4 percent.
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