NEW YORK (CNNMoney.com) -- The Dow ended higher Tuesday, finishing a volatile session with gains and breaking its seven-session losing streak as investors scooped up certain shares hit in the recent bloodletting.
The Dow Jones industrial average (INDU) added 57 points or 0.6% after having been up as much as 171 points earlier and briefly dipping into negative territory.
The Dow ended Friday's session at an 8-month low, closing lower for seven straight sessions, its worst streak since October 2008. The gains Tuesday broke that streak.
The Nasdaq (COMP) composite gained 2 points or 0.1%, after having risen as much as 44 points in the morning before dipping. Like the Dow, the Nasdaq ended Friday at an 8-month low.
The S&P 500 (SPX) added 5 points or 0.4%. The S&P 500 ended Friday's session at its lowest point in 9 months.
Stocks rallied through the early afternoon, slipped in the mid-afternoon, and seesawed erratically in the last hour of trading.
Selling in retail, transportation and select technology stocks was countered by strength in financial and energy shares.
"I didn't see anything driving the rally this morning other than it's a Tuesday after a holiday, so I wasn't surprised to see it fizzle," said Joseph Saluzzi, co-head of equity trading at Themis Trading.
"This is how the market is going to be for a while, particularly this week when some people are on vacation and there isn't a lot of economic news," he said. "The good thing is we could end up higher in the next few days because it's so volatile."
Concerns about the health of the U.S. economy and what hits it might take from the European debt crisis have dragged on stocks in recent months. On Friday, the major indexes closed at multi-month lows as investors pulled back ahead of a long holiday weekend. All U.S. financial markets were closed Monday in celebration of Independence Day.
Initially, investors followed European markets higher, but stocks ended up losing momentum as the day wore on.
Since peaking in late April, the Dow is down just under 14%, the S&P 500 is off 16% and the Nasdaq is off 17%.
"In the last two months and especially the last two weeks, everyone was focused on the negatives," said Bernard McGinn, CEO at McGinn Investment Management. "But longer term, I'm more optimistic. Companies aren't hiring yet, but other economic conditions continue to improve, just at a slow pace."
Retail stocks: Citigroup cut its targets on a number of retailers for the 2010 to 2012 period, citing a "hangover" for consumer spending in the second half and beyond after the first-quarter binge.
Citi cut its earnings per share forecasts and 12-month price targets on Home Depot (HD, Fortune 500), JC Penney (JCP, Fortune 500), Lowe's Companies (LOW, Fortune 500), Nordstrom (JWN, Fortune 500), Kohl's (KSS, Fortune 500), Macy's (M, Fortune 500), Saks (SKS), Target (TGT, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).
World markets: European markets surged across the board, with Britain's FTSE 100 gaining 2.9%, Germany's DAX advancing 2.2% and France's CAC 40 rising 2.7%.
Asian markets rallied as well, with Japan's Nikkei gaining 0.8%, Hong Kong's Hang Seng up 1.2% and the Shanghai Composite rising 1.9%.
Commodities: U.S. light crude oil for August delivery settled down 11 cents to $71.98 a barrel on the New York Mercantile Exchange, giving up earlier gains.
COMEX gold for August delivery ended down $13.20 to $1,195.10 an ounce.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 2.93% from 2.98% late Friday. Debt prices and yields move in opposite directions. Treasury markets were closed Monday.
BP: Shares of BP (BP), the beleaguered oil company, rallied 6% after a report said Libya's sovereign wealth fund might invest in the company and the company announced that it would not issue new shares to cover costs associated with the oil spill.
Both Saluzzi and McGinn said that the fallout from the oil spill was also continuing to drag on the markets as investors worried about the depth of the damage to the economy.
Market breadth: Market breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.32 billion shares. On the Nasdaq, decliners beat advancers two to one on volume of 2.19 billion shares.
Economy: The Institute for Supply Management's index on the services sector of the economy was released after the start of trading. The index fell to 53.8 in June from 55.4 in May. Economists surveyed by Briefing.com expected it to fall to 55. A reading above 50 signals expansion in the sector.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.89%||3.92%|
|15 yr fixed||3.05%||3.06%|
|30 yr refi||3.95%||3.97%|
|15 yr refi||3.10%||3.14%|
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