Stock gains accelerateMajor gauges extend advance Tuesday, as investors jump back into stocks after several down sessions; strength in overseas markets, rally in technology, provide support.NEW YORK (CNNMoney.com) -- Stock gains accelerated Tuesday afternoon, with investors using the recent battering as a chance to jump back in and buy equities at lower levels. The tech-heavy Nasdaq (up 35.54 to 2,376.22, Charts) composite added 1.6 percent with roughly 2-/12 hours left in the session, erasing Monday's losses. The Dow Jones industrial average (up 105.50 to 12,155.91, Charts) added over 100 points or almost 1 percent. The broader S&P 500 (up 14.48 to 1,388.60, Charts) index gained 1.2 percent. Both blue-chip averages recovered most of Monday's losses. "Today is some welcome relief, but I think it's too early to say we're out of the woods yet," said John Forelli, portfolio manager at Independence Investments. "Overseas markets were up today, so we're up today, but I don't know that this will last more than a day or so," he said. "We're still going to see choppiness for a few weeks." Stocks sank Monday - following last week's big selloff - as investors mulled weak overseas markets and further signs of trouble in the subprime mortgage lending business. But such concerns were set aside early Tuesday, with investors taking comfort in solid gains overseas and some bullish corporate news. Markets in Europe gained at midday, bouncing back from several down sessions. In addition, markets in Asia rose as the yen fell after several up days. Asian markets have been tumbling recently as the yen has been surging, with investors closing out carry trades, or bets on riskier assets, bought by borrowing in the currencies of countries with low interest rates, such as Japan. In currency trading, the dollar rallied against the yen and edged higher versus the euro. In deals news, Citigroup (Charts) is launching a $10.7 billion takeover bid for Nikko Cordial, a scandal-plagued Japanese brokerage that Citigroup already has a 5 percent stake in. Citigroup shares rose about 1 percent, and other financial shares bounced back as well, including Bear Stearns (up $5.09 to $149.59, Charts), Lehman Bros (up $2.89 to $74.01, Charts) and Goldman Sachs (up $6.59 to $196.59, Charts). The Amex Securities Broker/Dealer (Charts) index rose 2.4 percent. A variety of subprime mortgage lenders bounced back, after stumbling on Monday. New Century Financial (up $1.27 to $5.83, Charts), NovaStar Financial (up $0.60 to $4.88, Charts), Accredited Home Lenders (up $1.32 to $17.38, Charts) and Fremont General (up $1.01 to $6.90, Charts) all posted big gains. Google (up $10.11 to $451.05, Charts) rose 2 percent after it said at a tech conference that it will be working more closely with Apple (up $1.50 to $87.82, Charts). Microsoft and Citigroup are both Dow components. Overall, 26 out of 30 Dow components rose. Other standouts included Hewlett-Packard (up $0.76 to $39.51, Charts), IBM (up $1.27 to $93.08, Charts), Altria (up $1.98 to $84.19, Charts), Wal-Mart Stores (up $0.57 to $48.04, Charts) and Alcoa (up $0.72 to $32.45, Charts). Altria rose on a Deutsche Bank upgrade, Reuters reported. Gold, silver, aluminum, steel, natural gas and oil services stocks all bounced back. Market breadth was positive. On the New York Stock Exchange, winners trounced losers by almost 5 to 1 on volume of 1.1 billion shares. On the Nasdaq, advancers beat decliners by almost four to one on volume of 1.34 billion shares. A morning report showed that U.S. labor productivity was revised down in the fourth quarter, as expected. Unit labor costs, the report's inflation component, was revised upward. A separate report showed that factory orders fell a steeper-than-expected 5.6 percent in January after rising 2.6 percent in December. Investors also took in comments from Treasury Secretary Henry Paulson, who said the housing sector slowdown and problems with subprime lenders won't have a big impact on the financial sector or the economy. Treasury prices slipped, raising the yield on the 10-year note to 4.52 percent from 4.50 percent late Monday. Treasury prices and yields move in opposite directions. U.S. light crude oil for April delivery rose 23 cents to $60.30 a barrel on the New York Mercantile Exchange. COMEX gold for April delivery rose $4.30 to $643.50 an ounce. |
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