It was another topsy-turvy day that left the Dow chart looking like the Rocky Mountains.
After three attempts at a rally, the third time was the charm: The Dow Jones Industrial Average eked out a gain 172.04, or 2 percent, to close at 8691.25. The S&P 500 gained 1.3 percent.
The Nasdaq shed 0.7 percent, ending at a new five-year low, as some of its biggest names were pummeled by a dour outlook for the consumer.
The swings in the market are getting smaller — we're not seeing the 500, 600 and 700-point swings we did earlier in the month — but that hasn't made it much easier to stomach, market pros say.
"It's actually getting psychotic," said Michael Cohn, chief investment strategist at Atlantis Asset Management. "It's very hard to watch this market."
The first rally came during a congressional hearing on regulation in the financial crisis, which featured remarks by former Federal Reserve Chairman Alan Greenspan, who said he was "shocked" at the credit breakdown and that he was "partially" wrong to resist regulation of some securities.
The second came in the last few hours of trading, and the third was in the final 20 minutes when the Dow sprinted more than 230 points, swinging from a loss to a 172-point gain.
Boeing and AT&T were among the few gainers on the Dow, along with energy stocks ExxonMobil and Chevron as oil rebounded from its lowest level since June 2007 to settle at $67.84 a barrel. All four stocks rose at least 6 percent.
General Motors retreated 1.5 percent after an earlier bump following news that the auto maker is taking steps to conserve cash including involuntary layoffs and the suspension of matching paymentsinto 401(k) plans.
There was only one major economic indicator today, weekly jobless claims, but it was more bad news.
The number of U.S. workers filing new claims for jobless benefits rose by 15,000, more than expected,last week, reinforcing evidence about the weak state of the labor market.
The main question for everybody seems to be how bad a recession will be; most economists say the current downturn will be far harsher than the blip of the 1990-1991 or even 2000-2001 recessions.
Goldman Sachs is likely to be the next company to announce layoffs. The brokerage is preparing to lay off 10 percent of its work force, according to the Wall Street Journal. Its shares fell 5.6 percent.
Layoffs have hit companies across the spectrum, including Merck , Yahoo , Caterpillar and PepsiCo .
The pharmaceutical sector offered some encouragement, turning in some good earnings. Amgen jumped about 12 percent after it beat earnings expectations and raised its full-year earnings forecast. On the earnings front, drug makers Eli Lilly and Bristol-Myers Squibb also topped forecasts.
Dow Chemical'sprofit dropped but still came in above consensus, helped by price increases and strength in its agricultural business. Its shares jumped 11 percent.
>> See a roundup of today's earnings reports.
Altria'sprofit surpassed expectations by 2 cents a share as the company was able to charge more for cigarette brands such as Marlboro but warned that 2009 will be difficult. Its shares rose 1.5 percent.
United Parcel Service , the world's largest package delivery company, reported a 9.9 percent drop in profit that was milder than Wall Street had feared, though the company said it experienced a significant slowdown as the quarter came to an end. Still, its shares climbed 3.8 percent.
Efforts to alleviate the woes of the U.S. housing market, which started the world crisis, continue, with the Bush administration weighing a roughly $40 billion proposal to help forestall housing foreclosures, according to a report in the same paper.
U.S. foreclosure activity in September rose 21 percent from a year earlier but fell by double-digits from the prior month as some state laws slowed the foreclosure process, according to a monthly report by research firm RealtyTrac.
But there are reports that some buyers are trickling back to the housing market, attracted by rock-bottom prices.
Amazon.com shares ticked up 0.7 percent, after being down as much as 10 percent, after the online retailer late Wednesday cut its 2008 revenue and income forecasts, saying sales in the holiday quarter would fall short of Wall Street expectations.
But techs overall were hammered by investors amid worries about the outlook. BlackBerry maker Research In Motion fell 5 percent, while chip maker AMD lost 9.4 percent.
Still to Come:
THURSDAY: Earnings from Microsoft after the bell
FRIDAY: Existing-home sales; Earnings from LM Ericsson
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