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The Dow Jones Industrial Average was up by 170 points, or 1.6%, at 10987. The S&P 500 was higher by 21 points, or 1.8%, at 1145, and the Nasdaq was ahead by 52 points, or 2.2%, at 2394. Global markets are hoping for some type of action from the US ...
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NEW YORK (TheStreet) -- Stocks pared early gains but were holding positive territory as the market tries to find its footing ahead of Federal Reserve Chairman Ben Bernanke's speech at the end of the week.
AT&T Inc| T JPMorgan Chase & Co| JPM Dow Jones Industrial Average| ^DJI The Dow Jones Industrial Average was up by 73 points, or 0.7%, at 10,891. The S&P 500 was higher by 5 points, or 0.5%, at 1129, and the Nasdaq was ahead by 13 points, or 0.5%, at 2355. Markets were rebounding after last week saw all three indices slip around 5% amid volatile trading. Barry Knapp, U.S. equity portfolio strategist at Barclays, said that since traders often price in for bad news over the weekend, a bounce at the beginning of the week can sometimes be attributed to the lack of negative weekend news. "That's a bit simplistic but of course we're talking about collective psychology here." Investors were also speculating that Federal Reserve Chairman Ben Bernanke would lay out a potential plan to prop up the faltering U.S. economy in his annual speech at Jackson Hole, Wyo. "Right now investors' fears are driving the market, not any actual news," said Weyman Gong, chief investment strategist at Signature, who isn't anticipating a third quantitative easing program from Chairman Bernanke. "Markets are being driven more by the problems in Europe than by the problems in the States -- and the problems in Europe are ongoing. European leaders are really reluctant to come up with substantial solutions. They're just presenting piecemeal solutions that are largely forced by the market," Gong said, adding, "We believe big changes are needed for Europe. Either it becomes the United States of Europe with a more coherent fiscal policy or it breaks up." Uncertainty over the global economic outlook led to a mixed close in international stocks with the FTSE in London up 1% and the DAX in Frankfurt down 0.1%. Earlier, Hong Kong's Hang Seng rose 0.5% while Japan's Nikkei declined 1%. "We are working our way through a difficult period of vicious volatility, a byproduct of a severe slowdown, coupled with credit problems worldwide and a lack of players, both of the leadership and portfolio variety. It is a nasty, bad period," said RealMoney Contributor Jim Cramer in a recent blog post.
The utilities and financial sectors were performing especially weakly with Bank of America(BAC) and JPMorgan Chase(JPM) sinking to the bottom of the Dow. "European sovereign debt concerns are impacting sentiment in European financials and there's potential that could leak over to U.S. financials as well," said David Lefkowitz, equity strategist at UBS. Financial stocks are a gauge of how healthy or not the market is, says Lefkowitz. So far, "the financials haven't been confirming the movements higher in the S&P 500." Market breadth was nearly split down the middle with 57% of the 2.8 billion shares trading on the New York Stock Exchange rising while 41% were falling. Some 1.2 billion stocks were changing hands on the Nasdaq. Basic materials and conglomerates were the day's strongest sectors. Boeing(BA), AT&T(T), Home Depot(HD) and Intel(INTC) were trading near the top of the Dow under Hewlett-Packard(HPQ).
HP shares were surging 4% to $24.54 after the company cut the price of its TouchPad tablet to $99 last weekend after announcing that it would be discontinuing the device. Home-improvement retailer Lowe's(LOW) has been authorized to buy back up to $5 billion of its common stock. The company said it plans to use the full amount over the next two to three years. Shares were rising 1.6% to $19.61. Medical technology company Kinetic Concepts(KCI) got a takeover bid from ConvaTec that tops the agreement that Kinetic reached with funds for $68.50 a share in cash, or $6.3 billion, including debt. Kinetic's stock was up 2.2% to $66.83. Dollar Thrifty Automotive Group(DTG) said Sunday that it sent a letter to Hertz Global(HTZ) and Avis Budget(CAR) asking them to submit their "best and final definitive proposals" on potential mergers by October. Dollar Thrifty's stock was adding 2.2% to $63.25. Shares of Hertz were shedding 2.7% to $9.45 and shares of Avis Budget were off by 0.3% at $11.57. Oil prices are rising on news that Libyan rebels took most of Tripoli. The October crude oil contract was gaining $1.22 cents to trade at $83.48 a barrel. The uncertain environment was once again boosting gold prices, which neared the $1,900 an ounce level on Monday. In addition to concerns about the global growth outlook, there was also speculation that the Bank of Japan might intervene in the currency market to dampen a strengthening yen. Gold for December delivery was up by $39.70 at $1,892 an ounce, after trading as high as $1,898.60. The benchmark 10-year Treasury was down 11/32, lifting the yield to 2.102%. The dollar strengthened against a basket of currencies, with the dollar index up by 0.07%. . Economic data was light on Monday. A report showed that economic activity in the Chicago region improved slightly in July, even though the level remained in negative territory. The Chicago Fed's National Activity Index rose to a reading of -0.06 in July, from -0.38 in June. -- Written by Chao Deng and Melinda Peer in New York.>To order reprints of this article, click here:
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