Saguaro
11-12-2007, 03:43 PM
NEW YORK - Wall Street turned mixed in fractious trading Monday as investor expectations of further fallout from the ongoing credit crisis once again dominated the market.
Stocks rose in early trading and the Dow Jones industrials later rose more than 100 points before the market retreated in midafternoon. Analysts said investors have few reasons to sustain a rally, even with many stocks at enticingly low prices after recent routs.
News stories kept the subprime contagion in focus. Late Friday, E-Trade Financial Corp. said the value of its mortgage-backed securities has fallen significantlyand that it will need to take bigger-than-expected write-downs in the fourth quarter.
Meanwhile, troubled home lender Countrywide Financial Corp. said in a U.S. regulatory filing it could be "severely" limited if its credit rating drops into junk status. And Britain's HSBC Holdings PLC was seen as the next major financial institution to write down losses from exposure to the debt markets, according to a report from The Times of London. The bank will announce a $1 billion charge to its portfolio of high-risk subprime mortgages when it reports third-quarter results from its U.S. division, according to the report.
Investors were uncertain in the wake of heavy selling last week. "I don't think anyone quite knows what to make of today's market," said Paul Nolte, director of investments at Hinsdale Associates. "It is a decent day, given all of the mess from last week. But this is very, very short-term. All we are doing is reversing some of the action from last week."
Blue chips held on to some of their gains, but selling was especially strong among technology stocks, as more investors succumbed to the view that the sector is not strong enough to provide the economy with a cushion against the weakness in housing. Apple Inc. fell more than 5 percent after analysts described the weekend European launch of the iPod as disappointing.
In late afternoon trading, the Dow rose 49.10, or 0.38 percent, to 13,091.84, after falling 4.06 percent last week.
The Standard & Poor's 500 index rose 1.21, or 0.08 percent, to 1,454.91, while the Nasdaq composite index dropped 16.15, or 0.61 percent, to 2,611.79.
Falling issues outnumbered advancing shares by 16 to 15 on the New York Stock Exchange, where volume came to 1.16 billion shares.
Trading was light because of Veterans Day, with the government bond markets closed. This also could lead to higher volatility as institutional traders take positions ahead of economic reports, including readings on inflation, later in the week.
The dollar rebounded against other major currencies, bolstered by a sharp decline in the price of gold. Gold futures briefly fell under $800 an ounce before recovering some strength to close down $27 at $807.70 an ounce.
Light, sweet crude fell $1.70 to $94.62 a barrel on the New York Mercantile Exchange. The drop came on reports that OPEC would discuss increasing its output at an upcoming meeting in a bid to cool record crude prices.
"The problem is just the mood of the market," said Peter Cardillo, chief market economist at Avalon Partners, said of Wall Street. "There is a tense feeling that there will be still more problems with the subprime situation and a fear that things are going to get worse rather than better."
"The feeling is so bad that we did not even get much help from a drop in commodities prices," he said. "Nothing will change until we get a positive catalyst and I don't see one."
Apple fell $9.47, or 5.73 percent, to $155.90.
E-Trade plunged $5.018, or 58.3 percent, to $3.58, while Countrywide fell 10 cents, or 0.7 percent, to $13.73.
Citigroup Inc. regained some strength after last week's sell-off and was the biggest gainer among the 30 stocks that make up the Dow industrials. Citi rose $1.49, or 4.5 percent, to $34.58.
There was deal news that gave some lift to the market: International Business Machines Corp said it will buy software developer Cognos Inc for $5 billion, sending Cognos stock up $4.18, or 7.99 percent, to $57.14,
And Constellation Brands Inc. said it will pay $885 million for the U.S. wine business of Fortune Brands Inc. Constellation Brands stock dropped 7 cents, or 0.3 percent, to $22.92 as Fortune Brands shares rose $1.05, or 1.3 percent, to $80.22.
Tyson Foods Inc. fell 55 cents, or 3.7 percent, to $14.20 after the world's largest meat company forecast earnings for this year that were below what analysts were expecting.
The Russell 2000 index of smaller companies rose 1.63 to 774.01.
Overseas, Japan's Nikkei stock average closed down 2.48 percent and Hong Kong's Hang Seng index dropped 3.88 percent. Britain's FTSE 100 rose 0.52 percent, Germany's DAX index fell 0.07 percent, while France's CAC-40 rose 0.21 percent.
http://news.yahoo.com/s/ap/20071112/ap_on_bi_st_ma_re/wall_street
Stocks rose in early trading and the Dow Jones industrials later rose more than 100 points before the market retreated in midafternoon. Analysts said investors have few reasons to sustain a rally, even with many stocks at enticingly low prices after recent routs.
News stories kept the subprime contagion in focus. Late Friday, E-Trade Financial Corp. said the value of its mortgage-backed securities has fallen significantlyand that it will need to take bigger-than-expected write-downs in the fourth quarter.
Meanwhile, troubled home lender Countrywide Financial Corp. said in a U.S. regulatory filing it could be "severely" limited if its credit rating drops into junk status. And Britain's HSBC Holdings PLC was seen as the next major financial institution to write down losses from exposure to the debt markets, according to a report from The Times of London. The bank will announce a $1 billion charge to its portfolio of high-risk subprime mortgages when it reports third-quarter results from its U.S. division, according to the report.
Investors were uncertain in the wake of heavy selling last week. "I don't think anyone quite knows what to make of today's market," said Paul Nolte, director of investments at Hinsdale Associates. "It is a decent day, given all of the mess from last week. But this is very, very short-term. All we are doing is reversing some of the action from last week."
Blue chips held on to some of their gains, but selling was especially strong among technology stocks, as more investors succumbed to the view that the sector is not strong enough to provide the economy with a cushion against the weakness in housing. Apple Inc. fell more than 5 percent after analysts described the weekend European launch of the iPod as disappointing.
In late afternoon trading, the Dow rose 49.10, or 0.38 percent, to 13,091.84, after falling 4.06 percent last week.
The Standard & Poor's 500 index rose 1.21, or 0.08 percent, to 1,454.91, while the Nasdaq composite index dropped 16.15, or 0.61 percent, to 2,611.79.
Falling issues outnumbered advancing shares by 16 to 15 on the New York Stock Exchange, where volume came to 1.16 billion shares.
Trading was light because of Veterans Day, with the government bond markets closed. This also could lead to higher volatility as institutional traders take positions ahead of economic reports, including readings on inflation, later in the week.
The dollar rebounded against other major currencies, bolstered by a sharp decline in the price of gold. Gold futures briefly fell under $800 an ounce before recovering some strength to close down $27 at $807.70 an ounce.
Light, sweet crude fell $1.70 to $94.62 a barrel on the New York Mercantile Exchange. The drop came on reports that OPEC would discuss increasing its output at an upcoming meeting in a bid to cool record crude prices.
"The problem is just the mood of the market," said Peter Cardillo, chief market economist at Avalon Partners, said of Wall Street. "There is a tense feeling that there will be still more problems with the subprime situation and a fear that things are going to get worse rather than better."
"The feeling is so bad that we did not even get much help from a drop in commodities prices," he said. "Nothing will change until we get a positive catalyst and I don't see one."
Apple fell $9.47, or 5.73 percent, to $155.90.
E-Trade plunged $5.018, or 58.3 percent, to $3.58, while Countrywide fell 10 cents, or 0.7 percent, to $13.73.
Citigroup Inc. regained some strength after last week's sell-off and was the biggest gainer among the 30 stocks that make up the Dow industrials. Citi rose $1.49, or 4.5 percent, to $34.58.
There was deal news that gave some lift to the market: International Business Machines Corp said it will buy software developer Cognos Inc for $5 billion, sending Cognos stock up $4.18, or 7.99 percent, to $57.14,
And Constellation Brands Inc. said it will pay $885 million for the U.S. wine business of Fortune Brands Inc. Constellation Brands stock dropped 7 cents, or 0.3 percent, to $22.92 as Fortune Brands shares rose $1.05, or 1.3 percent, to $80.22.
Tyson Foods Inc. fell 55 cents, or 3.7 percent, to $14.20 after the world's largest meat company forecast earnings for this year that were below what analysts were expecting.
The Russell 2000 index of smaller companies rose 1.63 to 774.01.
Overseas, Japan's Nikkei stock average closed down 2.48 percent and Hong Kong's Hang Seng index dropped 3.88 percent. Britain's FTSE 100 rose 0.52 percent, Germany's DAX index fell 0.07 percent, while France's CAC-40 rose 0.21 percent.
http://news.yahoo.com/s/ap/20071112/ap_on_bi_st_ma_re/wall_street