BackDow, S&P rise in wild day, Nasdaq takes China hit
Dow, S&P rise in wild day, Nasdaq takes China hit
Premium
New York: US stocks mostly rose in a volatile session on Thursday as stronger-than-expected economic data and German approval of a beefed-up euro-zone crisis fund relieved two of the worst fears hanging over the market.
But the Nasdaq was knocked lower by a brutal sell-off in US-listed Chinese stocks on news of a probe into accounting practices and profit taking in Apple shares after a huge gain during the quarter.
The US Labor Department said initial applications for unemployment benefits fell to a five-month low last week.
Europe again averted disaster in its debt crisis when German deputies rallied behind Chancellor Angela Merkel to approve a stronger euro-zone bailout fund on Thursday.
“The vote in Germany is obviously positive news and is exactly what is needed to give the region the go-ahead to recapitalize their banks," said Deirdre Dennehy, portfolio manager at the Rockland, Massachusetts-based Rockland Trust, which has about $4.8 billion in assets under management.
The Dow Jones industrial average gained 143.08 points, or 1.30%, to 11,153.98. The Standard & Poor’s 500 Indexgained 9.34 points, or 0.81%, to 1,160.40. But the Nasdaq Composite Index dropped 10.82 points, or 0.43%, to 2,480.76.
Chinese Internet search engine Baidu, down 9.2% at $110.29, and other US-listed Chinese companies were among the biggest losers after a securities regulator told Reuters the US Justice Department was investigating accounting irregularities at Chinese companies listed on US exchanges.
Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, said the news was a negative for sentiment at a time when markets were already experiencing high levels of uncertainty and volatility.
“That’s not good news," he said. “It’s accounting related, it’s Chinese related. The relations between the two countries are tepid at best (and) you put this on the table during this period of time."
Tech names pressured the Nasdaq, with Amazon.com Inc off 3.2% at $222.44 following a sharp rally in Wednesday’s session. Advanced Micro Devices sank 13.7% to $5.31 after cutting its third-quarter revenue outlook, prompting many analysts to downgrade their views on the stock.
Apple shares fell 1.6% to $390.57 on profit taking after gaining more than 16% during the quarter.
Other big-cap Internet names were also down. Netflix Inc sank 11% to $113.19 while Yahoo Inc lost 5.4% to $13.42.
A Merrill Lynch index of Internet stocks, which includes Amazon and Yahoo, fell 3.01%.
Market volatility is likely to remain high as traders react to European headlines and attempt to gauge the commitment of governments and institutions as they work to prevent a Greek default.
End-of-quarter repositioning will also influence market movement. Friday will be the last day of the third quarter.
The benchmark S&P 500 index is expected to finish the year down for the first time in three years as an escalating European debt crisis and stalled US economy led strategists to slash forecasts in the latest Reuters poll.
About five stocks rose for every two that fell on the New York Stock Exchange. On the Nasdaq, more than five stocks rose for every three that fell.
About 8.62 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above this year’s average.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
