- Two subjects of interest in 1992 homicide to take polygraph tests (1/15/17)8
- Business notebook: Jackson salon owner also opens a clothing store (1/16/17)
- Young Elvis impersonator from Bernie performs on 'Ellen DeGeneres Show' (1/12/17)
- Cape SportsPlex contractor offers a look at the project (1/15/17)14
- Meat-processing plant faces $70K penalty for Clean Water Act violations (1/17/17)4
- Two men shot after argument; houses also struck by bullets (1/12/17)21
- Area hospitals hope a box helps prevent infant deaths (1/19/17)6
- Two Cape men recovering after shooting (1/13/17)
- Obama shortens sentence of inmate from Cape (1/19/17)9
- Subjects of interest in 1992 killing take polygraph tests; results not revealed (1/18/17)2
Stocks resume climb after one-day sell-off
NEW YORK -- Wall Street rose in late trading Wednesday as a surge in gold and other commodities prices gave investors a reason to snap up energy and materials stocks.
But the closing levels masked a confusing day in the market. Investors had sent stocks higher until midafternoon on expectations of a bailout for the Detroit automakers, but the market forfeited that advance on signs that the plan was running into opposition from Republican lawmakers. Investors then set aside their uncertainty, and plowed back into stocks as they saw the rebound in commodities.
Gold picked up $34.70 an ounce to close at $807.10 on the New York Mercantile Exchange, lifted by a weaker dollar, but also because investors seemed to be more willing to take on some risk -- a trend that has been apparent in the recent rally on Wall Street. Oil prices also rose on the Nymex, settling up $1.45 at $43.52.
In turn, companies that make their money from commodities, including Exxon Mobil Corp., which rose 2.4 percent, and mining company Freeport-McMoRan Copper & Gold Inc., which added 16 percent, rallied, boosting the rest of the stock market.
Richard E. Cripps, chief market strategist for Stifel Nicolaus, remains cautious but said the rise in commodities suggests that some investors are betting on an economic rebound. "At this point in time, commodities going up are a welcome sign," he said.
Still, investors are extremely wary about the many trouble spots in the global economy. And so shifting sentiment over a possible bailout deal for Detroit's Big Three automakers tugged at stocks throughout the session -- including financial stocks. Financial houses that hold investments in the car companies could see further strain on their balance sheets if big players like General Motors Corp. file bankruptcy.
Democrats in Congress and the White House finalized an agreement on $14 billion in loans for Detroit's struggling car companies. However, the plan negotiated by the White House is being opposed by a group of conservatives led by Sen. John Ensign, R-Nev.
The proposal would provide relief for General Motors Corp. and Chrysler LLC. Ford Motor Co. chief Executive Alan Mulally and executive chairman Bill Ford Jr. said Tuesday they don't need to take the bailout.
The Dow Jones industrial average rose 70.09, or 0.81 percent, to 8,761.42. On Tuesday, the Dow shed 243 points as investors after disappointing corporate news reminded investors of the magnitude of the economy's troubles. But the Dow and the Standard & Poor's 500 index have now advanced in 10 of the last 13 sessions.
The S&P 500 index rose 10.57, or 1.19 percent, to 899.24, and the Nasdaq composite index rose 18.14, or 1.17 percent, to 1,565.48. The Russell 2000 index of smaller companies rose 10.69, or 2.30 percent, to 476.40.
Since reaching multiyear trading lows on Nov. 20, the Dow has risen 16 percent and the broader S&P 500 has risen 19.5 percent, while the Nasdaq is up 19 percent.
"I think what you have now is people are looking among the carnage and saying wait a minute, maybe the baby was thrown out with the bath water" during the devastating selling of October and November, said John Merrill, chief investment officer at Tanglewood Wealth Management.
The number of stocks advancing on the New York Stock Exchange Wednesday outpaced those declining by 2 to 1. Volume came to a light 1.31 billion shares.
In the Treasury market, the four-week bill auctioned with a zero percent yield on Tuesday saw that rate increase. The yield rose to 0.05 percent after having been auctioned on Tuesday with a yield of zero percent. The auction was a dramatic sign of how cautious investors are -- they are willing to park their money for the short term in investments that will pay them nothing at all but that will preserve their principal.
The yield on the three-month T-bill fell to 0.01 percent from 0.03 percent late Tuesday, also indicating a high degree of investor unease. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.68 percent from 2.65 percent late Tuesday.
The dollar was lower against most other major currencies, which helped feed the rally in commodities.
The market was also watching American International Group Inc., which said Wednesday it is trying to work out plans to square away $10 billion lost in bad trades without turning to tax payers for more money. Last month, the government said it would provide $150 billion to help the insurer remain afloat after tight credit markets made it difficult to access cash.
"I think the fear is that there is going to be a continued need to raise capital," Ryan Larson, head of equities trading at Voyageur Asset Management, said of the financial sector.
That fed worries that other financial houses might be facing their own troubles after placing wrong bets in the unforgiving markets in recent months. The concerns rippled through financial services stocks, causing banks including Citigroup Inc. to give up early gains.
AIG fell 18 cents, 9.3 percent, to $1.75, while Citigroup fell 24 cents, or 2.8 percent, to $8.30 and JPMorgan Chase & Co. fell 44 cents, or 1.3 percent, to $33.52. Morgan Stanley fell 37 cents, or 2.5 percent, to $14.60.
GM declined 10 cents, or 2.1 percent, to $4.60, while Ford rose 2 cents, or 0.6 percent, to $3.25. Chrysler isn't publicly traded.
Overseas, Hong Kong's Hang Seng index closed up 5.59 percent, while Japan's Nikkei 225 added 3.15 percent. Britain's FTSE-100 fell 0.32 percent, Germany's DAX added 0.54 percent, and France's CAC-40 rose 0.68 percent.