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Bargain hunters
rescue stocks
NEW YORK >> A late-day buying rush rescued Wall Street from a losing session yesterday, overcoming record-high oil prices and downbeat economic news that had kept the major indexes in negative range for most of the session. Blue chip stocks closed higher, but tech stocks still lagged.
The final-hour advance came after oil futures topped $43 a barrel, a 21-year high, raising inflation worries among investors already nervous about slower growth in the second half of the year. Some analysts doubted the rally's conviction, however, attributing it to programmed trading -- when large investment houses automatically purchase shares because they've reached a pre-set buying point -- and simple bargain hunting after four weeks of selling.
"The valuations on the Standard & Poor's 500 are at a level we haven't seen since 1995, which is pretty impressive if you're out there shopping for stocks," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif. "However, the average investor doesn't have the confidence to do real buying in this market. It was nice to see the reversal ... but the fundamentals still tend to be on the negative side."
According to final results, the Dow Jones industrial average closed up 31.93, or 0.3 percent, at 10,117.07, making a dramatic recovery from a low of 9,994.22.
The broader gauges also came back from their session lows, but were mixed at the close.
The Nasdaq composite index fell 10.84, or 0.6 percent, to 1,858.26, largely on weakness among semiconductors. The Standard & Poor's 500 index finished up 0.59, essentially flat, at 1,095.42.
The price of the benchmark 10-year Treasury note rose 532 and its yield, which moves in the opposite direction, fell to 4.59 percent from 4.61 percent. The 2-year note added 332 point to yield 2.74 percent, down from 2.79 percent on Tuesday.
The Commerce Department reported orders to U.S. factories for big-ticket items rose 0.7 percent in June, slightly lower than what analysts had forecast. The gain in orders for durable goods -- items expected to last three or more years -- was good news after two months of declines, as it offered some hope that the rebound in the nation's manufacturing sector is no longer in danger of stalling.
Investors were less than impressed, however, as the lower-than-expected number comes after a several other business barometers showed weakness for June.
Most analysts agree the slowdown is temporary, but trading has been lackluster through the current earnings season due to a number of downbeat outlooks. Adding to that, September crude oil futures on the New York Mercantile Exchange closed up $1.06 at $42.90 a barrel.
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