Stocks fight to stay higher
Major indexes pare some gains but remain mostly higher, on drop in price of crude and financial sector strength.
NEW YORK (CNNMoney.com) -- Major indexes struggled to remain higher in Monday afternoon trade, despite a drop in the price of crude oil and strength among the embattled financials.
The Dow Jones industrial average (Charts) gained nearly 0.3 percent with 2-1/2 hours remaining in the session.
Stocks pulled back from their session highs Monday afternoon after getting a lift at midday on a combination of bargain hunting by investors and easing of credit market fears, said Rob Lutts, president and chief investment officer of Cabot Money Management.
"At the end of last week, the crescendo on the fear in the subprime market had reached an extreme," said Lutts. "I think this is a reflex rally from that."
Last week, major indexes were hit hard after a round of writedowns from Wall Street's biggest banks reignited credit market fears. The 30-stock Dow industrials fell 4.1 percent, while the S&P fell 3.7 percent and the Nasdaq dropped 6.9 percent.
Shares of Wall Street's biggest banks showed some resilience in Monday trading, despite reports on Monday of forthcoming writedowns from British banking giant HSBC (Charts). Shares of Merrill Lynch (Charts, Fortune 500) and Morgan Stanley (Charts, Fortune 500) were both over 2 percent higher. Citigroup (Charts, Fortune 500) shares gained more than 5 percent while Lehman Brothers (Charts, Fortune 500) stocks climbed nearly 7 percent.
Lower oil prices also helped boost investor sentiment as light, sweet crude for December fell $1.87 to $94.45 a barrel on the New York Mercantile Exchange Monday, on reports that OPEC would discuss increasing its output at an upcoming meeting.
With no economic reports slated for release Monday and the Treasury market closed for the Veterans Day holiday, investors were focused on the corporate front.
Shares of E-Trade Financial Corp. (Charts) plunged 58 percent Monday on the New York Stock Exchange after it warned late Friday that the deteriorating value of its mortgage-backed securities may force it to take significant writedowns in the fourth quarter.
Blackstone Group (Charts) posted a net loss in the most recent quarter Monday, hurt by compensation charges. Blackstone shares slipped nearly 6 percent on the news, even though it reported higher revenue in its core private equity business, helped by higher fees.
Tyson Foods (Charts, Fortune 500), the world's largest meat processor, turned a profit in its quarterly results, helped by cost-cutting measures. But shares of the company fell 6 percent after it issued forecasts below analysts' expectations.
Market breadth was positive. Winners barely beat losers on the New York Stock Exchange on volume of 874 million shares. Advancers beat decliners on the Nasdaq as 1.54 billion shares exchanged hands.
Gold prices tumbled after last week's big run-up, as COMEX gold for December fell $28 to $806.70 an ounce.