bernanke
U.S. stocks notched the biggest gain in more than two years amid a seesaw session Tuesday following the worst selloff since the financial crisis, as investors applauded the Federal Reserve's pledge to keep interest rates near zero at least through mid-2013.
The Dow Jones Industrial Average finished up 429.92, or 3.98%, at 11239.47, in whipsawed trading action. The index, which gained as much as 243 points at its morning high, saw its rally fade ahead of the Fed decision and turned sharply negative after the statement was released. It fell as much as 206 points at one point, before it turned positive again and surged higher in the final trading hour.
The blue-chip index notched its biggest gain since March 23, 2009, and the 10th-largest point gain in its history. All 30 components rose, led by Bank of America, which surged $1.09, or 17%, to 7.60. The gains came after the bank dropped 20% in Monday's session. Alcoa jumped 91 cents, or 8%, to 12.24, and American Express gained 3.06, or 7.1%, to 46.10.
The volatile trading came as the Fed signaled it will keep its benchmark short-term interest rate close to zero for at least two more years. The central bank also sharply downgraded its view of the U.S. economy.
In a statement after a one-day policy meeting, Fed officials said they expect the weak economy to warrant exceptionally low levels for the federal funds rate "at least through mid-2013." Seven voted in favor of this action, with three voting against. Fed officials also downgraded their assessment of the U.S. economy for the third time this year, saying that economic growth so far this year has been "considerably slower than...expected."
"We're still in a place of extreme fear and emotional trading," said Ron Florance, managing director of investing strategy and asset allocation for Wells Fargo Private Bank. "We're not even close to where fundamentals and valuations are driving market performance."
The Dow's sharp gains came after it fell 635 points on Monday, the sixth-biggest point drop in its history. Jittery investors have fretted in the wake of Standard & Poor's downgrade of the U.S. government's credit rating and the possibility that the economy could slide into another recession.
The Standard & Poor's 500-stock index rose 53.07 points, or 4.74%, to 1172.53, led by financial, material and consumer discretionary stocks. The index notched its biggest rise since March 23, 2009, and the ninth-largest point gain in its history.
All 10 of the S&P 500's sectors finished in positive territory. Financials, which were hit the hardest in Monday's drubbing, finished up 8.2%. Citigroup rose 3.87, or 14%, to 31.82, and American International Group gained 1.40, or 6.2%, to 23.98. The SPDR KBW Bank ETF, an exchange-traded fund of large bank stocks, surged 6.8%.
ben bernanke
The technology-oriented Nasdaq Composite gained 124.83 points, or 5.29%, to 2482.52, its biggest point gain since Oct, 13, 2008.
The Russell 2000 index of small-capitalization stocks rose 45.20 points, or 6.94%, to 696.16. The index was coming off its biggest single-session drop in its history on Monday, when it fell 8.9%. Small caps tend to make more exaggerated moves and are generally viewed as riskier than large companies.
"It's normal to have a bounce back after the downward moves we've had," said John Carey, portfolio manager at Pioneer Investments. "The key is whether this is a sustained recovery or just a sign of bargain hunters coming in and picking up beaten-down stocks."
Investors traded 8.93 billion shares in New York Stock Exchange composite volume, the second-biggest volume day of the year. Volume in the last four days of trading has averaged 8.69 billion shares. By comparison, the average daily volume this year, excluding Tuesday's action, is 4.21 billion.
Market participants said stocks were due for a bounce after the recent sharp drops. Investors were looking for clues pertaining to any options the Fed may have to boost the economy and combat the market's recent slide. As of Monday's close, the blue-chip Dow had tumbled 15% in the previous 11 sessions. The S&P 500 had fallen 17% over the same time span.
While the Fed didn't announce a bold step of buying more bonds that some in the markets had hoped for, the move to keep the benchmark short-term interest rate near zero may help keep borrowing rates low and drive investors into riskier assets like stocks.
"We're still so painfully oversold from the previous few sessions," said Keith Bliss, senior vice president at Cuttone & Co., a brokerage on the New York Stock Exchange floor. "But the downdraft and recovery following the Fed statement shows how temperamental the market is. There's a lot of emotion in the market. And when there's emotion, you'll get a lot of big intraday swings."
Gold futures reflected continued extreme investor anxiety. The safe-haven asset pared earlier gains and recently traded above $1,761 an ounce, adding to Monday's record settlement on the New York Mercantile Exchange. Crude-oil futures erased earlier gains and fell below $79 a barrel after settling Monday at the lowest level of the year. The U.S. dollar lost ground against both the euro and the yen.
"Yesterday was a fear-and-panic and hysteria-driven trade," said Joseph Tanious, market strategist at J.P. Morgan Asset Management. "Today we're seeing that unwind a little bit. But there's a lot of nervous energy in the air. The word recession is being thrown around, and it's making people anxious."
In corporate news, E*Trade Financial bowed to pressure from its largest shareholder, Citadel LLC. The financial company said its board formed a new special committee of independent directors, which hired Goldman Sachs, to conduct a review of strategic alternatives. Shares rose 88 cents, or 8.1%, to 11.81.
Dow component Walt Disney rose 1.67, or 5.1%, to 34.70 ahead of its fiscal third-quarter results. After the closing bell, the media giant said its quarterly profit rose 11% on better results at its television and theme-park divisions. But shares fell 1.6% in after-hours trading as Disney also registered another period of income decline at its studio segment.
Northern Oil & Gas's second-quarter earnings more than tripled on hedging gains and soaring oil and gas sales. Shares soared 5.27, or 40%, to 18.52.
Cablevision's second-quarter profit rose 44% as gains from an acquisition boosted revenue and customer additions. Results missed analyst expectations, and the stock tumbled 2.50, or 13%, to 17.02.
AOL's second-quarter profit fell short of Wall Street's expectations, even as the Internet media firm saw its first growth in world-wide online advertising revenue since 2008. The stock took a sudden drop in early trading that triggered a pair of temporary stock halts. Shares fell 3.88, or 26%, to 11.19.
Fossil's second-quarter earnings fell 5.7% as gross margins narrowed and operating expenses grew. The watch and fashion-accessories retailer gave a weak third-quarter earnings outlook. Shares tumbled 11.74, or 13%, to 82.15.
Hiç yorum yok:
Yorum Gönder