Wall Street has managed a moderate gain after an attack of nerves had investors giving back a big early advance and then heading back into the market before close.
NEW YORK (AP) — Wall Street has managed a moderate gain after an attack of nerves had investors giving back a big early advance and then barreling back into the market right before the close.
Trading was extremely erratic — the Dow Jones industrials rose as much as 203 points in early trading in response to upbeat economic data, then fell nearly 110 during the afternoon before closing up 90. Analysts said weak demand during an auction of government debt stirred up worries about how easily Washington will be able to raise money to fund its economic rescue program. The fear in the market is that the government might not be able to easily raise the hundreds of billions of dollars it needs.
The day shows how fragile Wall Street remains despite a two-week rally that saw the Dow regain more than 1,000 points. The market was pulled in different by opposing forces Wednesday that led to choppy trading – which may well be the pattern for stocks going forward.
“There was a mix of good and bad news and at the end of the day the good news won out,” said Alan Skrainka, chief market strategist at Edward Jones. “It’s a jumpy market.”
Doug Roberts, chief investment strategist at ChannelCapitalResearch.com, said, “Right now there is a lot of crosscurrents coming. People want to be flat going in to the following day. They really don’t want to be holding a major position.”
Some analysts said the late surge was due in part to short covering. That’s a trend caused by investors who had borrowed and sold stock on a bet the market would fall, and who have to cover their positions when they see the market starting to turn higher.
The day’s oscillations, which recall some of the volatile trading Wall Street saw during the worst of its fall and winter selling, aren’t surprising and in fact may be a sign of the market’s resilience. While no one knows if the market is indeed recovering, analysts expect some pullbacks and uncertainty as investors try to figure out their next moves.
The Dow closed up 89.94, or 1.17 percent, at 7,749.81, while the Standard & Poor’s 500 index rose 7.63, or 0.95 percent, to 813.88 and the Nasdaq composite index rose 12.43, or 0.82 percent, to 1,528.95.
Two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.77 billion shares.