Nasdaq leads comeback attempt
Tech-fueled index advances after shaky morning, but broader market is restrained after weak economic news, mild April retail sales forecasts, ongoing growth worries.
NEW YORK (CNNMoney.com) -- The Nasdaq rose and the broader market stalled near midday Monday, as investors tried to recover from the previous day's slump, but struggled with higher oil prices, weak economic news and dour April retail sales forecasts.
The Dow Jones industrial average (up 4.06 to 12,488.68, Charts) and the broader S&P 500 (up 1.56 to 1,440.43, Charts) index both added a few points around 2-1/2 hours into the session. The Nasdaq (Charts) composite gained 0.3 percent.
The major gauges had declined in the early going, extending the previous session's big selloff. But the tone improved a bit as the morning wore on, with tech, biotech, energy and homebuilders leading a recovery
Dell (up $0.39 to $24.64, Charts), eBay (up $0.18 to $33.79, Charts) and Applied Materials (up $0.17 to $19.40, Charts) were among the heavily-traded stocks rising. MedImmune (up $4.36 to $42.20, Charts) jumped 13 percent in unusually active trading after the biotech said it had hired Goldman Sachs to help it explore a sale of the company.
Stocks tanked Wednesday - and fell again early Thursday - after the minutes from the last Federal Reserve policy meeting made it clear that the central bank is unlikely to cut interest rates anytime soon.
Investors have been looking for signs that the Fed might lower borrowing costs, which can ultimately stimulate business and earnings and boost stock prices. However, the minutes - echoing the sentiments of recent Fed speakers - showed that the bankers aren't likely to budge, or could even raise rates this year as they balance rising inflationary pressures and a worsening economy.
Thursday's batch of weaker economic reports and weaker retail sales forecasts played into such concerns. The number of Americans filing new claims for unemployment jumped last week. Additionally, March import prices jumped more than expected.
"Investors are trying to work through whether yesterday was a one-day event or a reality check," said James Awad, president at Awad Asset Management.
After slumping in late February on global growth concerns, stocks spent March recovering, earning back most of what was lost. But concerns about the growth versus too much growth issue are likely to continue to limit any market advance.
Looking forward, "you're going to have bi-polar worries on both sides, but the reality will be down the middle, with good enough growth for profits, but not so much as to push inflation."
He said in the short term, stock may get an upward push from earnings, simply because expectations for the first quarter are so diminished that companies are likely to beat forecasts.
Wal-Mart Stores (down $0.06 to $47.21, Charts), Target (up $0.29 to $59.97, Charts) and Nordstrom (up $0.07 to $54.92, Charts) were among the retailers that reported better-than-expected March sales, but warned about April sales.
Among other stock movers, Sprint Nextel (up $0.53 to $19.71, Charts) shares gained on reports that activist shareholder Ralph Whitworth has built a nearly 1 percent stake in wireless telecom and is calling for big changes at the company
BlackBerry maker Research In Motion (Charts) reported a sharply higher fourth-quarter profit Wednesday, but also said the Securities and Exchange Commission has upgraded its informal probe into its stock options practice into a formal investigation. Shares slumped Thursday.
Treasury prices rose modestly, lowering the yield on the benchmark 10-year note to 4.72 percent from 4.73 percent late Wednesday.
In currency trading, the dollar remained steady against the euro and edged up just slightly against the yen.