Surprisingly calm investors pushed modestly stocks higher yesterday, helping Wall Street recover from steep early losses after the London...
NEW YORK — Surprisingly calm investors pushed modestly stocks higher yesterday, helping Wall Street recover from steep early losses after the London terror attacks that killed dozens and injured more than 700.
Investors took heart after the homeland-security secretary said there was no “specific credible evidence” of a pending attack in the United States. A sharp drop in oil prices also helped the markets rally.
Traders said the timing of the London attacks, several hours before the start of trading in New York, allowed investors to overcome any knee-jerk reactions to the news. Jay Suskind, head trader at Ryan Beck & Co., said buy orders quickly entered the market as stocks sold off at the opening bell, and the markets made steady gains throughout the day.
“Unfortunately, this is the world we live in now. Five years ago, the market would have been down much more. Now, we see it as a buying opportunity,” Suskind said. “There’s no panic.”
Most Read Stories
- Calling their bluff: A Seattle doctor pegs what the GOP health bill is really about | Danny Westneat
- Investigators’ task to find out why U.S. destroyer failed to dodge cargo ship
- Police investigate officer who shot Charleena Lyles after he left Taser in locker
- Mike Hopkins beats out former team to secure Hameir Wright for UW men's basketball
- Kent police fatally shoot man after car chase
The Dow Jones industrial average climbed 31.61, or 0.31 percent, to 10,302.29. The Dow had fallen more than 103 points in the first hour of trading.
On the Dow, Boeing closed at $65.18, up 89 cents, and Microsoft dropped 5 cents to close at $24.65.
Broader stock indicators also recovered to post gains for the day. The Nasdaq composite index rose 7.01, or 0.34 percent, to 2,075.66, while the Standard & Poor’s 500 index was up 2.93, or 0.25 percent, at 1,197.87.
The major indexes opened about 1 percent lower, but climbed steadily through the session, jumping higher around noon as Homeland Security Secretary Michael Chertoff commented that there was no evidence of a terrorist threat in the United States.
Nonetheless, investors bought up bonds, always seen as a safer investment than stocks. The yield on the 10-year Treasury note fell to 4.06 from 4.07 percent late Wednesday. Gold prices, another traditional safe haven for investors, also rose.
The dollar hit a 14-month high against the British pound after the explosions, but fell against the euro and was mixed against other major currencies.
Crude-oil futures fell sharply after the Energy Department reported a drawdown of 3.6 million barrels of crude from the nation’s petroleum reserves.
Gasoline reserves also fell, but heating oil and other distillate reserves were up sharply. A barrel of light crude settled at $60.73, down 55 cents, on the New York Mercantile Exchange after losing more than $2 per barrel earlier in the session.
Heating-oil futures slipped by 1.99 cent to settle at $1.7749 per gallon on Nymex, where gasoline futures rose 1.57 cent to settle at $1.8056 a gallon.
Europe’s markets suffered sharp losses, but investors were hopeful after European stocks regain some ground in late trading. Britain’s FTSE 100 fell by as much as 4 percent, but recovered somewhat and closed 1.36 percent lower. France’s CAC-40 fell 4.5 percent before recovering to a loss of 1.39 percent for the session, and Germany’s DAX index was down 1.85 percent.
“American investors are not only reacting emotionally, they’re trying to figure things out, trying to determine the economic impact of what happened,” said Ken Tower, chief market strategist for Schwab’s CyberTrader. “When you’re not at the epicenter, that’s easier to do. There were many more cooler heads outside of New York after 9-11, after all.”
In addition, U.S. markets have become somewhat used to the threat of terrorism after the Madrid rail bombings of 2004 and attacks the previous year in Morocco, Turkey and Saudi Arabia that were all linked to al-Qaida.
“A certain amount of this is built in to the market,” Suskind said. “And sad to say, when it’s overseas and isn’t targeting financial institutions, the markets can recover pretty quickly.”
Global markets operated normally, with even the London Stock Exchange closing at its normal time.
In response to the attacks in London, investors sent biotechnology and biodefense shares higher. Human Genome Sciences gained 36 cents to $12.18, while Hollis-Eden Pharmaceuticals rose 34 cents to $7.90.
Airline stocks fell, however, as investors feared further terrorist attacks. U.S.-traded shares of British Airways dropped $1.55 to $46.32, while American Airlines parent AMR was down 14 cents at $12.08 and Delta Air Lines lost 10 cents to $3.38.
Charles Schwab added 70 cents to $12.68 after the company said it was not for sale and would remain independent. The brokerage was seen as a takeover target after the recent merger of Ameritrade Holding and online broker TD Waterhouse.
Advancing issues outnumbered decliners by more than 9 to 7 on the NYSE, where volume came to 1.15 billion shares, compared with 1.07 billion at the same point Wednesday.
The Russell 2000 index of smaller companies was up 1.03, or 0.2 percent, at 649.30.
In other overseas markets, Japan’s Nikkei stock average fell 0.12 percent. The markets there closed before the London attacks occurred.