Stocks stage turnaroundWall Street manages an 11th hour comeback, erasing big losses to end in positive territory.Video
NEW YORK (CNNMoney.com) -- Stocks gained Friday, staging an impressive late-session comeback after sliding for nearly two sessions on ongoing worries about the economy. According to early tallies, the Dow Jones industrial average (INDU) ended 0.8% higher and the broader Standard & Poor's 500 (SPX) index also ended with gains of 0.8%. The Nasdaq composite (COMP) added 0.2% after having fallen into bear market territory during the session, defined as a drop of at least 20% off the recent highs. The major gauges tumbled Thursday after a weak regional manufacturing report added to fears that the economy is headed for a recession, if not already in one. There was no fresh economic data to set the tone Friday and after a sluggish start to the session, stocks turned lower. "It appears now that we have a real threat of inflation, in addition to the slowing economy, and the subprime issue is still there," said Dean Barber, president at Barber Financial Group. "With all of that going on, there is enough uncertainty that people are reluctant to buy." But in the last half hour of trade, stocks managed to bounce back, due in part to market rumors that a consortium of banks could announce a plan to bail out troubled bond insurer Ambac Financial as soon as next week. The week ahead brings reports on new and existing home sales, producer prices, durable goods orders, consumer confidence and personal income and spending. Corporate news. Here's a look at what was moving late in the session. A number of financial stocks slumped, including Dow components American Express (AXP, Fortune 500), Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and JP Morgan (JPM, Fortune 500). Bond insurer MBIA (MBI) slumped 7% after Deutsche Bank cut its earnings estimates. On Thursday MBIA quit the Association of Financial Guaranty Insurers, a trade group, after 22 years, due to disagreements over the right direction for the industry. Bond insurers, such as MBIA, have been in focus lately due to worries that if they can't raise enough capital, their top-notch credit ratings will be downgraded, which would make it harder for them to get new business and could also lead to more bank writedowns. Mortgage finance firms Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM) slipped after Merrill Lynch downgraded both companies to "sell" from "neutral." Among other movers, tax preparation software-maker Intuit (INTU) slumped 10% after the company forecast current-quarter and full-year earnings short of analysts' estimates. Big technology losers included Intel (INTC, Fortune 500), Oracle (ORCL, Fortune 500), Microsoft (MSFT, Fortune 500) and Apple (AAPL, Fortune 500). On the upside, shares of telecom Sprint (S, Fortune 500) rose 2% in afternoon trade. Market breadth was negative. On the New York Stock Exchange, losers beat winners 3 to 2 on volume of 1.42 billion shares. On the Nasdaq, decliners topped advancers 8 to 7 on volume of 2.3 billion shares. Other markets. U.S. light crude oil for April delivery rose 58 cents to settle at $98.81 a barrel on the New York Mercantile Exchange. The March crude futures contract settled at an all-time high of $100.74 a barrel Wednesday after touching a trading high of $101.32. COMEX gold for April delivery fell $1.40 to settle at $947.80 an ounce. Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.81% from 3.77% late Thursday. Bond prices and yields move in opposite directions. In currency trading, the dollar fell versus the euro and the yen. |
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