BackDow ends with gain after falling below 12,000
Dow ends with gain after falling below 12,000
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Wall Street gyrated and then steadied itself on 14 March 2007, closing with a respectable advance although the Dow Jones industrials fell as much as 136 points and briefly dropped below the 12,000 mark before recovering.
Stocks bounced back and forth a day after concerns about faltering subprime mortgage lenders sparked a broad selloff. H&R Block Inc. had added to Wall Street’s uneasiness by announcing after the closing bell a day before that its third-quarter losses would rise because of a $29 million writedown at its mortgage arm.
The anxiety over mortgage lenders, particularly the subprime lenders that make loans to people with poor credit, pushed the Dow down by more than 240 points on 13 March 2007, its second-biggest drop in nearly four years. Such concerns jostled stocks for much of Wednesday’s session.
“I think the market got below 12,000 and buyers came in," said Todd Leone, managing director of equity trading at Cowen & Co.
The Dow Jones industrial average rose 57.44, or 0.48% , to close at 12,133.40.
Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 9.22, or 0.67% , to 1,387.17, and the Nasdaq composite index rose 21.17, or 0.90% , to 2,371.74.
Bonds fell as stocks bandied about; the yield on the benchmark 10-year Treasury note rose to 4.52% from 4.50% late on 13 March. Gold prices fell.
After Tuesday’s big decline, the market appeared to have been awaiting further economic data—notably the producer price index to come on 15 March and the consumer price index a day later—for signals about the economy’s health and whether an interest rate cut might be in the offing. Lower interest rates would make access to capital cheaper and perhaps inject strength in the housing market.
Wall Street’s turbulence came as stocks in Europe closed sharply lower, apparently seeing little room for optimism that U.S. markets would rebound. Britain’s FTSE 100 fell 2.61% , Germany’s DAX index lost 2.66% , and France’s CAC-40 fell 2.52% . Japan’s Nikkei stock average closed down 2.92% , while Hong Kong’s Hang Sang index fell 2.57% and the sometimes volatile Shanghai Composite Index fell 1.97% .
The dollar, which was mixed against other major currencies, rose against the yen. Some observers have fingered the ascendent yen with contributing to the volatility seen in recent weeks on Wall Street. A rise in the yen against the dollar stirred concern of a reduction in the so-called yen carry trade, which occurs when investors use the yen to acquire higher-yielding assets elsewhere.
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