Dow industrials climb 57 to break seven-day slide
Published 1:01 am Wednesday, July 7, 2010
NEW YORK (AP) — The Dow Jones industrial average broke a seven-day slide Tuesday after traders sifted through the market for beaten-down stocks.
The Dow rose 57 points, or 0.6 percent, after dropping 7.3 percent in just the past two weeks and reaching its lowest level since October. Traders were looking to pick up stocks while they’re still cheap, but the buying was selective and there were more losing stocks than gainers on the New York Stock Exchange. The Dow rose as much as 172 points in morning trading but also fell into the red by mid-afternoon.
“There are pockets of opportunity out there. There are some areas with good valuations,” said Aaron Reynolds, senior portfolio analyst at Robert W. Baird in Milwaukee.
High-tech and oil service companies were among the market leaders. But retailers slumped amid downbeat comments from analysts and ahead of reports later in the week on June sales. Investors are concerned that a weakening of the economic recovery will keep cautious consumers out of stores. Macy’s Inc. fell 2.5 percent, while Home Depot Inc. lost 1.5 percent.
The unevenness to the day’s moves signaled that traders remain on edge about the economy.
Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J., said a rise in Treasury prices made it clear that worries remain. Treasurys have been rallying during the past month as investors worried about where the economy is heading looked for a safe place for their money.
“We’ve obviously ratcheted down the outlook and now it’s a question of how much further,” Dolan said, referring to the economy. “From here I would expect to see further weakness.”
The day’s economic news didn’t offer investors much incentive to buy. The Institute for Supply Management, a trade group of purchasing executives, said growth in services businesses slowed last month. Its services index fell to 53.8 from 55.4 in May. Economists polled by Thomson Reuters forecast a reading 55.0. Anything above 50 indicates growth.
The Dow rose 57.14, or 0.6 percent, to 9,743.62. The broader Standard & Poor’s 500 index rose 5.48, or 0.5 percent, to 1,028.06, and the Nasdaq composite index rose 2.09, or 0.1 percent, to 2,093.88.
The market’s advance came after stocks dropped Friday on a report found that employers didn’t ramp up hiring as much as economists had forecast. It was the second straight month hiring by private employers missed expectations. U.S. markets were closed Monday for Independence Day.
Meanwhile, bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.94 percent from 2.98 percent late Friday.
Crude oil fell 16 cents to settle at $71.98 a barrel on the New York Mercantile Exchange.
Oil service companies rose after a Barclays Capital analyst upgraded ratings for the industry. Halliburton Inc. rose 72 cents, or 2.8 percent, to $26.46.
Some of the tech stocks that were pounded in recent weeks had a natural bounce back. Microsoft Inc. rose 55 cents, or 2.4 percent, to $23.82. Intel Corp. rose 28 cents, or 1.5 percent, to $19.48.
Macy’s fell 44 cents, or 2.5 percent, to $17.41, while Home Depot fell 42 cents, or 1.5 percent, to $27.34.
The number of stocks that fell narrowly outpaced those that rose on the NYSE, where consolidated volume came to 4.7 billion shares, compared with 4 billion Friday.
The Russell 2000 index of smaller companies fell 8.94, or 1.5 percent, to 590.03.
Overseas markets rose after investors found stock prices more attractive and Australia’s central bank issued an upbeat forecast for the country’s economy. Britain’s FTSE 100 rose 2.9 percent, Germany’s DAX index gained 2.2 percent, and France’s CAC-40 jumped 2.7 percent. Japan’s Nikkei stock average rose 0.8 percent.