11th hour rally on Wall Street

Major gauges break into the black minutes before the closing bell after a tumultuous session.

By Jessica Dickler, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Stocks rallied late in the session Wednesday as investors weighed credit concerns and oil prices in addition to some better-than-expected economic news and corporate earnings reports.

The Dow Jones industrial average (up 101.77 to 13,313.76, Charts) rose over 150 points, or 1.2 percent after struggling for most of the session.


The broader Standard & Poor's 500 index (up 11.70 to 1,466.97, Charts) added 0.7 percent and the tech-heavy Nasdaq composite index (up 5.37 to 2,551.64, Charts) gained 0.3 percent.

All three major gauges got off to a rocky start on the heels of a stock selloff in the previous session.

But stocks bounced into the black briefly after the Institute for Supply Management reported that nationwide manufacturing activity fell more than expected and the National Association of Realtors' pending home sales index jumped more than expected in June.

Oil prices weighed in following the government's weekly report on crude inventories, which showed a huge drawdown last week. U.S. light crude for September delivery sank $1.26 to $76.95 a barrel after reaching a peak of $78.77, according to Reuters.

In addition, credit concerns, a slumping real estate market and corporate earnings compounded investors nervousness throughout the session, according to Art Hogan, chief market strategist at Jefferies & Co.

"We don't know the magnitude of all of those issues," Hogan said, and "that is giving markets the jitters."

Here's what was moving near the close:

In corporate news, Rupert Murdoch finally won his battle for the publisher of The Wall Street Journal. Dow Jones (up $0.62 to $58.00, Charts) agreed to be taken over by News Corp. (up $0.02 to $21.14, Charts) for $5.6 billion.

Time Warner (down $1.45 to $36.78, Charts), which owns CNNMoney.com, reported second-quarter earnings that topped analysts' estimates and said it has authorized an additional $5 billion stock repurchase. Investors weren't impressed, though, and shares tumbled nearly 5 percent.

Kraft Foods (down $0.30 to $32.45, Charts) posted higher quarterly profit, but shares of the Oreo maker fell.

Alltel (up $0.29 to $66.24, Charts, Fortune 500) rose after the wireless service posted a higher quarterly profit as revenue rose.

Cigna (down $3.23 to $48.41, Charts, Fortune 500) reported lower net income, but operating earnings beat Wall Street expectations. Shares of the health insurer sank 6 percent.

Shares of Qwest Communications (down $0.17 to $8.36, Charts, Fortune 500) also fell 2 percent after the telecommunications carrier said second-quarter profit rose, but came in short of expectations.

DaimlerChrysler (down $1.72 to $89.03, Charts) and Ford Motor (down $0.12 to $8.39, Charts, Fortune 500) both reported sharp drops in July auto sales, while General Motors (up $0.39 to $32.79, Charts, Fortune 500) said sales slumped 22 percent, more than expected. This could be the first month on record that domestic brands fall below 50 percent of overall U.S. auto sales.

After the closing bell Tuesday, Whole Foods (up $2.35 to $39.39, Charts, Fortune 500) posted profit that fell less than Wall Street expected, sending shares up 5 percent.

And Blackboard (down $6.03 to $38.20, Charts) tumbled 13 percent after the educational software company forecast third-quarter sales below Wall Street expectations.

Also on Tuesday, news that a third Bear Stearns (down $4.73 to $116.49, Charts, Fortune 500) hedge fund is reportedly in jeopardy added to jitters. The Wall Street Journal reported Tuesday night that a Bear Stearns fund with about $900 million in mortgage investments is refusing to return investors' money. Shares of the investment bank fell 4 percent.

And American Home Mortgage Investment Corp. (up $0.41 to $1.45, Charts) said that lenders had cut off its access to credit and that it may have to liquidate its assets. After a big fall Tuesday, shares gained 38 percent.

Market breadth was negative and volume was heavy. Losers beat winners on the New York Stock Exchange by nine to seven on volume of 2.4 billion shares. Decliners topped advancers by three to two on volume of 3 billion shares on the Nasdaq.

Treasury prices fell, raising the yield on the benchmark 10-year note to 4.78 percent from 4.74 percent late Tuesday. Bond prices and yields move in opposite directions.

The dollar gained against the euro and was little changed versus the yen.

COMEX gold for December fell $3.40 to $675.90 an ounce. Top of page