Wall Street in modest recovery after sell-off
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Traders work on the floor of the New York Stock Exchange in New York, June 30, 2010.
Credit: Reuters/Shannon Stapleton
NEW YORK |
NEW YORK (Reuters) - Wall Street rebounded on Tuesday, but strong buying interest evaporated in the afternoon as bearish sentiment reasserted itself.
Ending a five-day string of losses, the major indexes bounced back after the S&P 500 closed at a 10-month low on Friday, but investors used the morning's gains as an opportunity to sell rather than establish new long positions.
"A lot of people got excited about how cheap things have gotten," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.
"Absolutely nobody believes in the rally, at least the ones we'll be seeing for now. The market sentiment is bearish and there is no doubt that the economic recovery is slowing down."
Bryan McCormick, analyst at optionMonster.com, said the day's trading activity was classic behavior for a bear market, "which can often have wild swings to the upside that lure in the unwary, then fade just as they seem to offer refuge and solace."
The Dow Jones industrial average .DJI was up 57.14 points, or 0.59 percent, at 9,743.62. The Standard & Poor's 500 Index .SPX was up 5.48 points, or 0.54 percent, at 1,028.06. The Nasdaq Composite Index .IXIC was up 2.09 points, or 0.10 percent, at 2,093.88.
Banks stocks ended higher, with Bank of America Corp (BAC.N) up 1.6 percent to $14.06 and the KBW bank index .BKX 1.2 percent higher. Goldman Sachs rose 0.9 percent to $132.26.
The Institute for Supply Management's reading on service sector activity showed economic growth in June but at its slowest pace since February, heightening concerns about sluggish economic recovery.
Retailers were the top decliners after Citigroup cut targets on retail stock prices, including Home Depot (HD.N), Macy's Inc (M.N) and JC Penney Co (JCP.N).
Home Depot fell 1.5 percent to $27.32 and Macy's fell 2.5 percent to $17.41. JC Penney shares were off 1.6 percent at $20.83.
In the options market, the most active trades were on put options for exchange-traded funds that track the S&P 500 benchmark and the Nasdaq, suggesting that investors are betting on further declines.
British oil company BP (BP.L)(BP.N) ruled out a share issue amid talk of a sovereign wealth fund's interest in a stake, boosting its shares even as the Gulf of Mexico oil slick spread to the Texas coast. [ID:nLDE6650FT]. A BP relief well is seven days ahead of schedule, the U.S. spill incident commander said.
BP's U.S.-traded stock gained 8.7 percent to $31.91.
Overall volume was tepid, with about 8.69 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion.
Declining stocks outnumbered advancing ones on the NYSE by 1532 to 1488, while on the Nasdaq, decliners beat advancers 1785 to 893.
(Reporting by Angela Moon, Editing by Kenneth Barry)
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How is that recovery coming Man of the Year Bernanke?
Lying thieving stealing cheating federal reserve with its foot on the neck of the economy as it grabs for even more power in Obama’s so called financial reform bill.
As the economy worsens – I want every american to know that it was the mega banks, first and foremost, who facilitated and profited from this crisis.
It is the mega banks that should be broken up and punished severely for our country’s economic woes with JP Morgan Chase and Goldman Sachs at the top of the list!
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