Stocks greet 2009 with sharp rise
NEW YORK – Wall Street started 2009 with a big rally Friday as investors, brushing aside a disappointing report on manufacturing, sent the Dow Jones industrials up more than 250 points and to their first close above 9,000 in two months. All the major indexes shot up more than 6 percent for the week.
The market lived up to the hopes of many analysts that it would have a fresh start in the new year after a horrific 2008. But many traders were also waiting to see how the market fares next week; they’re cognizant of the fact that post-holiday volume was light and therefore Friday’s trading might not be the best indicator of market sentiment.
Todd Leone, managing director at Cowen & Co., cautioned against reading too much into Friday’s advance and said the first full week of the new year should provide insight into investor sentiment for 2009.
“The first five days are usually very telling,” Leone said. “I’m not sure we’ll be up or down.” He said an advance in stocks Friday wasn’t a surprise as some investors start the year by wading into the market. He said selling is more likely to occur next week.
The Dow rose 258.30, or 2.94 percent, to 9,034.69, finishing the week up 6.1 percent. The blue chips last closed above 9,000 on Nov. 5, when they stood at 9,139.27.
The Dow, the oldest of the big market indexes, fell 33.8 percent in 2008, its worst performance since 1931, during the Great Depression.
Like the Dow, broader stock indicators also advanced for the third straight session. The Standard & Poor’s 500 index rose 28.55, or 3.16 percent, to 931.80, its highest close since Nov. 5. The Nasdaq composite index rose 55.18, or 3.50 percent, to 1,632.21.
For the week, the S&P 500 finished up 6.8 percent, while the Nasdaq rose 6.7 percent.
The Russell 2000 index of smaller companies rose 6.39, or 1.28 percent, to 505.84.
Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange. Consolidated volume came to 3.48 billion shares, compared with 3.75 billion on Wednesday.
Bond prices fell as investors took on riskier assets including stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.39 percent late Friday from 2.22 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments and in great demand since the credit markets seized up in September, fell to 0.07 percent from 0.08 percent Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude rose $1.74 to settle at $46.34 a barrel on the New York Mercantile Exchange.
Since hitting multiyear lows on Nov. 20, the Dow has advanced 19.6 percent, while the S&P 500 is up 23.8 percent.