Wall Street rallies during turbulent week
NEW YORK – Wall Street capped a week of remarkable volatility with a big advance Thursday that left stocks higher for the week but didn’t silence all investor concerns.
Bargain-hunting and a milder-than-expected drop in a regional manufacturing report helped leaven stocks Thursday. The Dow Jones industrial average rose about 260 points on the day, giving the blue chips a gain of more than 3 percent for the week. Broader indexes finished the week with gains of 2 percent to 3 percent. The markets are closed for Good Friday.
A week that opened with fearful questions over the soundness of the financial system following the near collapse of Bear Stearns Cos. ended on a more upbeat note, thanks in part to the Federal Reserve’s efforts to inject both liquidity and calm into the markets.
The Labor Department said the number of newly laid off workers filing for unemployment benefits rose last week by a more-than-anticipated 22,000 to 378,000. That level is the highest in nearly two months. Meanwhile, the Conference Board said its index of leading economic indicators fell, as expected, for the fifth straight month in February.
But Wall Street found reason to buy back into stocks after a sell-off Wednesday when the Philadelphia Fed said manufacturing activity is dropping in March by less than it did in February, and by less than many economists anticipated.
And another day of sharp declines in commodities prices gave investors some hope that lower energy and food prices might boost consumers’ discretionary spending and ease inflation concerns. Crude oil fell, while gold prices declined sharply.
The Dow on Thursday rose 261.66, or 2.16 percent, to 12,361.32, and gained 3.43 percent for the week.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 31.09, or 2.39 percent, to 1,329.51, and the Nasdaq composite index rose 48.15, or 2.18 percent, to 2,258.11.
For the week, the S&P rose 3.21 percent, while the Nasdaq gained 2.06 percent.
Though the week was a shortened one for Wall Street, the volatility packed into four days made it feel much longer. Thursday’s gains came a day after a steep drop that eroded most of a 420-point gain in the Dow on Tuesday – the biggest in more than five years – following the Fed’s decision to lower its benchmark interest rate by 0.75 percentage point to 2.25 percent.
Stock markets overseas were mostly lower. Hong Kong’s Hang Seng Index fell 3.5 percent, but the Shanghai Composite Index closed 1.1 percent higher after an early plunge. Britain’s FTSE 100 closed down 0.91 percent, Germany’s DAX index lost 0.65 percent, and France’s CAC-40 0.49 percent.