A fractious Wall Street rebounded from an early plunge to finish moderately higher Thursday, after Standard & Poor's predicted financial...
NEW YORK — A fractious Wall Street rebounded from an early plunge to finish moderately higher Thursday, after Standard & Poor’s predicted financial companies are nearing the end of the massive asset write-downs that have devastated the stock and credit markets.
The Dow Jones industrial average finished up 35.50 at 12,145.74, after being down more than 220 points early in the session and then popping up more than 100 points.
Microsoft, one of the 30 Dow stocks, slipped 1 cent to close at $28.62 a share. Boeing, also a Dow stock, gained $1.73 to $74.18.
Broader market indexes also recovered from steep early losses. The S&P 500 index rose 6.71 to 1,315.48, while the Nasdaq composite index rose 19.74 at 2,263.61.
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The S&P projection gave investors hope that the seemingly unrelenting losses from the mortgage and credit crisis might be bottoming out. Standard & Poor’s Ratings Services said it estimates write-downs of subprime asset-backed securities could reach $285 billion globally, up from its previous projection of $265 billion, but added that “the end of write-downs is now in sight for large financial institutions.”
“The S&P comment was a positive for the market because investors were relieved to think that the subprime problem may be behind us,” said Al Goldman, chief market strategist at A.G. Edwards.
Wall Street clearly remains anxious, however. On Tuesday, the stock market launched its largest rally in more than five years after the Federal Reserve said it would auction $200 billion in Treasurys to help alleviate investment banks’ financial bind. But since then, stocks have been extremely volatile.
Kim Caughey, equity-research analyst at Fort Pitt Capital Group, said that while she is a market bull, it’s possible investors extrapolated a bit too much good news from the S&P report. “I would rather see fewer foreclosures and housing prices bottoming out to decide that the credit crisis is drawing to a close,” she said.