Business


Bargain hunters help session close up

THURSDAY, JAN. 10, 2008

NEW YORK – Wall Street finished a back-and-forth session sharply higher Wednesday as investors sought bargains while also contending with concerns about the strength of the economy and upcoming corporate results.

The Nasdaq composite index showed its first gain in nine sessions and the Dow Jones industrial average gained more 200 points in the final 90 minutes of the session to finish nearly 150 points higher.

The gains at the end of a fractious session came ahead of a fourth-quarter report from Alcoa Inc., which marked the unofficial start of earnings season.

Wednesday’s session was as choppy as Tuesday’s, when stocks tumbled amid concerns about the economy. Unease about the economy has caused intense market volatility since the start of the year, with stocks rising on hopes for more interest rate cuts, and plunging as investors doubt that will be enough. The market is also worried about how fallout from the mortgage and credit crisis has affected corporate earnings.

A prediction of a recession in 2008 by Wall Street’s biggest investment bank at times appeared to weigh on investors. Goldman Sachs said it expects fallout from the housing slump and recent tightness in the credit markets will spread to the broader economy this year.

Countrywide Financial Corp. may have added to the seesaw trading, saying Wednesday that the delinquency and foreclosure rate of home loans in its portfolio surged in December. The stock in the nation’s largest mortgage lender had fallen sharply Tuesday amid bankruptcy rumors that the company said were baseless. Countrywide fell 35 cents, or 6.4 percent, to $5.12.

Wednesday brought little in the way of economic news and investors instead awaited a speech by Federal Reserve Chairman Ben Bernanke set for today that could give clues about the central bank’s stance on the weakening economy.

The up-and-down days on Wall Street are likely to continue as investors grapple with their concerns about the economy, according to Thomas Nyheim, vice president and portfolio manager at Christiana Bank & Trust Co.

“Things are definitely slowing. The problem is, the more and more economists and strategists come out and say things are slowing, you could get a real downturn,” he said. He said the market’s pullback, however, has left stock prices at more appropriate levels.

The Dow rose 146.24, or 1.16 percent, to 12,735.31.

Broader stock indicators also rebounded. The Standard & Poor’s 500 index rose 18.94, or 1.36 percent, to 1,409.13, and the Nasdaq composite index, which had been down more than 1 percent during the session, finished up 34.04, or 1.39 percent, at 2,474.55.

Overseas, Japan’s Nikkei stock average closed up 0.49 percent. Britain’s FTSE 100 fell 1.32 percent, Germany’s DAX index dropped 0.86 percent, and France’s CAC-40 fell 1.10 percent.


 

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