Stocks Close Higher On Bargain-Hunting
Stocks rebounded to close higher, helped by bargain hunting in beaten-down shares of large technology companies and a partial recovery by financial stocks.
Shares of companies likely to better withstand a slowing economy also rose. Pfizer gained 2.1 percent to rank among the top advancers on both the Dow and the S&P 500.
Earlier, stocks had struggled to hold onto gains, swinging intermittently from negative to positive territory, due to renewed worries about the impact of the credit crisis.
"There's some bargain hunting and some people feel that, despite the slowdown in some of the economic indicators, we're OK," said Michael Metz, chief investment strategist at Oppenheimer. "People are looking for re-entry points, but .... they are very cautious about going back into
"It's just a really jittery market, where it goes up this morning and gives people who are selling the opportunity to say 'now's as good a time as any' and people sell into strength," said Matthew Tuttle, president of Tuttle Wealth Management.
That doesn't necessarily mean they're won't still be the much-anticipated end-of-year rally, but it may not happen until after Christmas.
"I really think we're going to see some window dressing at some point where all these portfolio managers who are nowhere close to their benchmarks are going to start buying up some stronger names to look smart," Tuttle said. "At this point I think the market has priced in just about everything bad that can happen and then some. I don't see a lot of downside from here."
An infusion of money to ease the credit crunch as well as gains in energy helped generate some early momentum.
The European Central Bank and Bank of England flooded money markets with fundsas the UK central bank chief warned of a possible "self-reinforcing" downward spiral in credit.
The Bank of England charged a minimum bid rate of 5.36 percent for its offer of 10 billion pounds ($20.3 billion) of 3-month money, as part of a coordinated action with other central banks to ease market tensions by offering cash at favorable rates.
At the same time, electronics retailer Best Buy reported profit higher than analysts had estimated. The company said strong sales helped raise its full-year earnings forecast, but shares still tumbled after a company official said its gross profit rate would slip in the fourth quarter.
Goldman Sachs shares also fell even though fourth-quarter earnings rose as a timely bet against subprime mortgages and higher investment banking fees helped it sidestep the credit crunch that hammered the rest of Wall Street. The stock initially gained, but slipped after a company executive expressed uncertainty about Goldman's near-term prospects.
Shares were broadly lower at other sector leaders as well, with JP Morgan Chase the biggest drag on the Dow.
Adobe Impresses; Sprint Makes Change
Shares of desktop publishing software maker Adobe Systems rose after the company said Monday its fiscal fourth-quarter profit, excluding one-time items, topped analysts' expectations.
Elsewhere in tech, navigation device maker Garmin saw its shares slump after it announced it was dropping out of a bidding war for TeleAtlas.
And Epix Pharmaceuticals was among the biggest gainers on the tech-heavy Nadaq on news that tests were largely positive for an Alzheimer's drug it has under development.
In other markets, the dollarheld a nearly two-month high against major currencies while oilgave up early gains and turned lower by late-morning. Stocks followed oil's direction through the day, though equities stayed higher as oil closed lower.
The earlier rise in oil prices helped energy stocks, with shares up at Chevron and ConocoPhillips.
Bucking the losing trend of financials, American International Group was among the leading gainers of Dow components. Thornburg Mortgage shares moved up as well after the company announced a new CEO and declared a fourth-quarter dividend of 25 cents a share.