Markets ended mixed today after stocks shuttled all session between sharp gains and losses as investors wrestled with their fears about...
NEW YORK — Markets ended mixed today after stocks shuttled all session between sharp gains and losses as investors wrestled with their fears about the economy but also hunted for bargains after two days of selling.
Investors were gravitating toward big-name stocks seen as safer bets — tech and small-cap stocks ended the day with declines.
At the close, the Dow Jones industrial average was up 172.04, or 2 percent, at 8,691.25. On Wednesday, the Dow lost 514 points as investors worried that the global economy is poised to weaken. That was on top of a 231-point loss Tuesday.
Broader stock indicators ended mixed. The Standard & Poor’s 500 index gained 11.33, or 1.3 percent, to 908.11, while the technology-heavy Nasdaq composite index fell 11.84, or 0.7 percent, to 1,603.91 after online retailer Amazon.com lowered its revenue forecast.
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Buying came in spurts and then quickly evaporated as investors fretted that the economy is either in a recession or headed for one despite government relief efforts and gradual improvements in world credit markets. Two days of selling that sliced nearly 750 points off the Dow drew bargain seekers, but not investors with any confidence that a market turnaround is near.
With its gyrations, Wall Street is living up to predictions that trading will remain volatile as investors try to test whether the market has formed a bottom. And several of the market’s attempts to rally have been short-circuited by sellers who had been waiting for an advance to cash out.
“I think it’s people selling into rallies and not being all that excited to buy into declines,” said Manny Weintraub, president of Integre Advisors in New York, referring to the market’s difficulty maintaining its gains.
Wall Street’s jitters came as investors tried to digest a rush of corporate news. Goldman Sachs Group is preparing to cut about 10 percent of its work force, according to a person briefed on the plan who requested anonymity because the company hadn’t publicly disclosed details of the plan.
Meanwhile, Seattle-based Amazon.com lowered its revenue guidance for the year amid a weakening economy. Drugmaker Eli Lilly and Co. said it booked a loss for the third quarter on a charge of almost $1.5 billion for an expected settlement of an investigation into the marketing of its top-selling drug, Zyprexa. Dow Chemical said its quarterly profit rose 6 percent, helped by price hikes that offset a nearly 50 percent increase in raw materials and energy costs.
A snapshot of the labor market signaled that it continues to weaken. The Labor Department reported today that new applications for unemployment benefits rose 15,000 last week to a seasonally adjusted 478,000. That was slightly above analysts’ estimates of 470,000. Jobless claims above 400,000 are considered a sign of recession. A year ago, claims stood at 333,000, the department said. Analysts caution, however, that the weekly readings can be volatile.
Investors viewed the data as more evidence that the financial crisis is battering the economy and forcing companies to cut back. Market anxiety was already high as investors sift through a batch of corporate forecasts that has stirred intense unease about the health of the global economy.
Thomas J. Lee, U.S. equities strategist at JPMorgan Chase & Co. in New York, cautioned that the market will need to rein in its sharp swings before some investors will feel confident enough to return.
“I don’t think anyone can buy and sell stocks right now with conviction,” he said.