Rebound lifts Wall Street to a positive finish
By Seth Sutel AP Business Writer
NEW YORK (AP) – Wall Street scratched out its first winning session in nearly two weeks Wednesday in volatile trading that saw investors vacillate between bargain hunting and profit taking.
Analysts were skeptical the gain would last, characterizing the advance as a brief rebound in the market’s eight-week selloff. Although some second-quarter reports this week have been encouraging, significant doubts remain about whether stocks still have further to fall. As a result, many investors are reluctant to make big or lasting commitments.
The Dow Jones industrials closed up 69.37, or 0.8 percent, at 8,542.48, according to preliminary calculations, after advancing as much as 250 points earlier in the day and then falling into negative territory. Still, the gains were enough to interrupt a seven session, 900-point plunge.
Broader indicators were also higher, despite losing ground from earlier in the session. The Nasdaq composite index was up 21.99, or 1.6 percent, at 1,397.25, and the Standard & Poor’s 500 index rose 5.10, or 0.6 percent, to 906.04.
The last time all three indexes closed higher was July 5, when the Dow soared 324, the Nasdaq gained 68 and the S&P advanced 35.
Wednesday’s gains, although modest, were a respite from the spate of volatility the market has been suffering for weeks now.
“You’re witnessing a pitched battle between two camps,” said Kevin Caron, market strategist at Ryan, Beck & Co. in Livingston, N.J. “You’ve got the bearish contingent concerned about accounting scandals, and you’ve got value investors who are looking for bargains.”
In trading Wednesday, Boeing was up $2.07 at $42.94 after beating expectations by 12 cents a share.
Ford Motor advanced 2 cents to $12.52 on a sharp jump in second quarter profits that beat analysts’ expectations by 5 cents per share, breaking a string of four consecutive losing quarters.
But Coca-Cola fell 37 cents to $50despite reporting a 15 percent jump in second-quarter profits.
Financial stocks were mixed. Citigroup, the parent company of Salomon Smith Barney and Citibank, rose 73 cents to $36.93 after reporting results slightly ahead of expectations. But J.P. Morgan Chase fell 36 cents to $28.14 on results that missed Wall Street forecasts.
Technology stocks fared better. Intel soared $1.08 to $19.44 on disappointing second-quarter results and news of 4,000 job cuts. And Juniper Networks rose 90 cents to $9.21.
The fluctuations came on another day of testimony from Federal Reserve Chairman Alan Greenspan, who told a House committee he doesn’t believe the CEOs of all publicly held companies should be required to verify the accuracy of company finances with federal regulators.
Also, President Bush expressed confidence that Vice President Dick Cheney would be vindicated by a government investigation into accounting practices at Cheney’s former employer Halliburton. The SEC is looking at the period when Cheney was Halliburton’s chief executive.
Analysts said investors were focused on preserving their portfolios and whether the market would continue to fall. The market’s volatility, which has been blamed on everything from low investor confidence to computer program selling and buying that kicks in at certain stock prices, is giving many investors few reasons to expect improvement soon. Until that changes, a sustainable rally is unlikely.
“What we need to do is get investor sentiment turned around. But it’s hard to that because we can’t get any continuity on the upside here. This is the kind of market just crushes the spirit of investors,” said Michael Murphy, head trader at Wachovia Securities.
Also Wednesday, the Commerce Department reported housing construction fell 3.6 percent in June, but analysts said the figures were still healthy and suggested demand remains strong.
Advancing issues led decliners 4 to 3 on the New York Stock Exchange, where volume came to 1.92 billion shares, up from Tuesday’s pace of 1.84 billion.
The Russell 2000 index advanced 2.42 at 409.69.
Overseas, Japan’s Nikkei stock average rose 0.44 percent. In Europe, Germany’s DAX index advanced 2.9 percent, Britain’s FTSE 100 surged 4.2 percent, and France’s CAC-40 rose 3.7 percent.
—
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com