You are here
US stocks make rebound
NEW YORK —The US stock market bounced back yesterday, a day after suffering its second-worst loss this year. Bank of America, JPMorgan Chase and other big lenders posted solid gains even though many of them had their credit ratings cut the day before. Analysts said the downgrades from Moody’s Investor Service late Thursday had been expected for months and removed some of the uncertainty that had been weighing on bank stocks.
“It’s been like a cloud over the sector,” said Brian Gendreau, market strategist with the broker Cetera Financial. “And look at who’s going up: bank stocks. There are obviously some people who thought it would be much worse.” The Dow Jones industrial average gained 67.21 to close at 12,640.78. Bank of America gained 1.5 per cent, or 12 cents, to US$7.94, one of the best showings of the 30 stocks in the Dow.
In a note to clients, analysts at the investment bank Keefe Bruyette & Woods called Morgan Stanley “the clear winner.” Some analysts had expected Moody’s to lower Morgan Stanley’s rating by three notches, instead of the two-notch cut it received.
Bank stocks rose across the board. Morgan Stanley rose 18 cents to US$14.14. JPMorgan Chase climbed 48 cents to US$35.99.
The Standard & Poor’s 500 index rose 9.51 points to 1,335.02 and the Nasdaq composite index climbed 33.33 points to 2,892.42. The gains turned the Nasdaq positive for the week. Information technology stocks had the strongest gains of the ten industry groups tracked by the S&P 500 index, followed by healthcare stocks and banks. The gains were small but widespread. All ten sectors rose. Of the 30 stocks in the Dow, just two fell.
The Dow and S&P 500 finished the week lower, their first week of losses since June 1. The biggest drop of the week came Thursday, when a trio of weak manufacturing reports stirred fears about the global economy. The Dow lost 251 points, its second-steepest fall this year. The worst was June 1, after a dismal US jobs report rattled markets.
Even with two days of deep losses, the S&P 500 is still up 1.9 per cent this month. To Gendreau, it looks like investors have been overreacting to recent economic reports. “The market is getting jerked around,” he said. “The economic data point to a softening economy, but we’ve had a softening economy for three years now.”
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff. Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Please help us keep out site clean from inappropriate comments by using the flag option.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments. Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.