Northwest Arkansas Democrat-Gazette
MARKET REPORT Stocks recuperate most of early losses
The stock market took an early plunge Thursday but recovered nearly all of the ground it lost.
The Dow Jones industrial average fell 24.5 points, or 0.2 percent, to 16,177.24.
The Standard & Poor’s 500 index added 0.27 points, or 0.01 percent, to 1,862.76. The Nasdaq composite gained 2.07 points, or 0.1 percent, to 4,217.39.
The S& P 500 is up 0.8 percent for the year, while the Nasdaq is up 1 percent. The Dow remains down 2.8 percent for the year.
Small-company stocks also rebounded. The Russell 2000 index added 13.36, or 1.3 percent, to 1,085.81. The index is still down 6.7 percent for the year.
The Dow sank as much as 206 points in the first hour of trading, turned higher an hour later, then wavered in a small range the rest of the day. The moves echoed Wednesday’s trading, when the Dow plunged as much as 460 points, then recovered much of that loss to close down 173.
Despite the relatively calm day, many market pros say investors haven’t seen the last of the big moves.
Traders are still fretting that global growth will slow and that Europe could slip into another recession, hurting corporate profits. Then there are the many geopolitical uncertainties, from conflicts in Syria and Iraq and uncertainty over the Ebola virus outbreak in West Africa.
“The sailing has been much too smooth, so going forward, at the very least, [we’re] back to normal turbulence,” said Erik Davidson, deputy chief investment officer of Wells Fargo Private Bank.
On Thursday, investors drew some encouragement from new data on the labor market and the latest batch of corporate earnings. Energy stocks surged as oil prices bounced back, notching only their fourth daily gain in a month.
“We had some positive economic data that reminded everybody that the economy is doing quite well,” said Randy Frederick, a managing director of trading and derivatives with the Schwab Center for Financial Research.
Remarks from St. Louis Fed President James Bullard also helped perk up stocks. In an interview with Bloomberg TV, Bullard said that the Federal Reserve should consider putting off winding down its monthly bond purchases this month as planned.
Bullard is not a voting member of the central bank’s policymaking committee, but as the head of a branch of the Fed, investors still followed his remarks closely. The Fed’s monthly bond purchases are $15 billion. The Fed’s Sept. 17 policy statement said the purchases would end at the October meeting if the central bank’s expectations for improvements in the labor market and inflation continued to be met.
Investors also assessed a mixed bag of U.S. economic data.
A key highlight: U.S. unemployment aid applications fell last week to the lowest level in 14 years, another sign that the job market is strengthening.
U.S. Treasury yields stabilized. The yield on the 10-year Treasury note rose to 2.15 percent from 2.14 percent late Wednesday.
The price of oil rebounded somewhat despite an Energy Department report showing a sharp increase in U.S. stockpiles. Benchmark U.S. crude rose 92 cents to close at $82.70 a barrel on the New York Mercantile Exchange.
Brent crude, a benchmark for international oils used by many U.S. refineries, rose 69 cents to close at $84.47 on the ICE Futures exchange in London.