Bargain buying lifts Dow 553 pts, S&P up 7%

Bargain buying lifts Dow 553 pts, S&P up 7%

New York: US stocks surged on Thursday and broke a three-day losing streak after the S&P 500 and Nasdaq touched new five-year lows earlier in the session, prompting investors to put aside worries about the flagging economy and scoop up wilted shares at fire-sale prices.

Capping off a volatile session, energy stocks led the market higher alongside a recovery in oil prices as Opec looked ready to cut production again. Chevron and Exxon Mobil gave the Dow its biggest lift, while oil rose over 5% above $59 a barrel in post-settlement trading.

But analysts said news about the economy was still grim, after Intel Corp slashed its revenue outlook, underscoring concerns that the ailing global economy is hurting technology spending by businesses and consumers.

At one point during Thursday’s session, the S&P 500 fell below its 10 October closing low to its lowest since March 2003, a key technical breach that traders said suggested the market could find short-term support. The Dow industrials briefly fell below 8,000, while both the S&P 500 and Nasdaq fell through their 2008 lows set in October.

Orlando said there was nothing fundamental to account for the afternoon surge, noting that “technically, some folks thought they needed to put money to work."

The Dow Jones industrial average jumped 552.59 points, or 6.67%, to 8,835.25. The Standard & Poor’s 500 Index surged 58.99 points, or 6.92%, to 911.29. The Nasdaq Composite Index climbed 97.49 points, or 6.50%, to 1,596.70.

Swing Time

The three major US indexes swung in a wide band from high to low, with the S&P 500 traveling 94.32 points from its session low at 818.69 to intraday peak at 913.01, while the Dow industrials covered 911.17 points and the Nasdaq moved 168.16 points.

Chevron jumped 12.5% to $75.71, while Exxon rose 9.4% to $75.41. An S&P index of energy companies soared 11.1%.

Intel reversed an earlier decline and rose 6.7% to close at $14.43 on the Nasdaq, spurring other big-cap technology shares to shift gears and push higher.

After Wednesday’s closing bell, Intel cut its revenue outlook, citing weak demand globally.

Among gainers, Microsoft rose 4.7% to $21.25, while Apple gained 7% to $96.44.

Citigroup Inc pared earlier losses, but remained the biggest drag on the Dow, losing 2% to $9.45, after a report that directors are unhappy with the bank’s performance and may replace its chairman. Citi’s board of directors reiterated its full support for Chairman Win Bischoff.

General Motors fell 4.2% to $2.95 after Goldman Sachs suspended its rating and said the ailing automaker needs at least $22 billion in federal aid.

Wal-Mart Stores Inc gained 4.4% to finish at $54.93, after moving between negative and positive territory throughout the session. Wal-Mart, the world’s biggest retailer and a Dow component, reported a slightly better-than-expected rise in quarterly profit, but lowered its full-year outlook.

Adding to the negative outlook on the economy, a government report showed the number of people filing new claims for jobless benefits in the latest week shot to the highest in seven years, since the weeks after the 11 September attacks in 2001.