Countrywide report buoys investors
NEW YORK – A volatile Wall Street advanced Thursday for the second day in a row, as investors found renewed confidence in a report that Bank of America Corp. is close to buying struggling mortgage lender Countrywide Financial Corp.
After seesawing earlier in the day, the Dow Jones industrials finished up nearly 120 points on the afternoon report from the Wall Street Journal. The stock market has been buffeted by concerns about fallout from the mortgage and credit crisis. Countrywide’s problems with delinquent and defaulting loans have sent stocks falling even in recent days.
Credit concerns were one reason the market waffled in earlier trading, with investors trying to reconcile comments on the economy from Federal Reserve Chairman Ben Bernanke and Kansas City Fed President Thomas Hoenig. Stocks jumped after Bernanke said the Fed was ready to lower interest rates again to ward off a recession.
But they bobbled up and down before turning narrowly mixed after Hoenig said later that inflation remains a concern and the stock market is “not the center of our attention.” The comments kept alive fears that the Fed may not respond to investor concerns even as it monitors the weakening economy.
Wall Street is worried that it will take a lot more than rate cuts to restore economic momentum.
The Dow Jones industrial average rose 117.78, or 0.92 percent, to 12,853.09.
Broader stock indicators also rebounded. The Standard & Poor’s 500 index rose 11.20, or 0.79 percent, to 1,420.33, while the technology-heavy Nasdaq composite index rose 13.97, or 0.56 percent, to 2,488.52.
The dollar fell against other major currencies. Gold rose to another record on the New York Mercantile Exchange, while crude oil fell $1.96 to $93.71 a barrel.
Overseas, Japan’s Nikkei stock average fell 1.45 percent. Britain’s FTSE 100 fell 0.80 percent, Germany’s DAX index dropped 0.89 percent, and France’s CAC-40 declined 0.64 percent.