November 27, 2008 / 12:29 AM / 11 years ago

Wall Street jumps on tech rebound, GM and energy

NEW YORK (Reuters) - Stocks climbed on Wednesday as investors snapped up tech stocks trading near their cheapest levels in five years, and renewed hopes of a General Motors bailout helped investors shrug off data depicting a worsening global economic downturn.

Specialists work on the floor of the New York Stock Exchange in New York November 25, 2008. REUTERS/Lucas Jackson

The Nasdaq rose 4.6 percent, led by Apple and Cisco, which rebounded from Tuesday’s big sell-off on concerns about weakening demand.

The Dow has risen 15.6 percent in the last four days, the largest four-day percentage gain since 1932.

Wednesday’s surge was fueled by energy stocks after oil rose more than 7 percent and General Motors shares soared over 35 percent.

Automakers’ shares rose after Deutsche Bank said the beleaguered companies’ prospects for a federal bailout have improved.

The U.S. government’s recent move to prop up Citigroup may have helped investors overlook more economic data that continued to show a weakening economy, market participants said.

“For the last two days, it’s been made very clear that the Fed and Treasury are opening up pocketbooks,” said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

“As a result, it has become less likely that a major financial institution will run into trouble and it’s becoming more likely that the auto sector will receive some assistance.”

The Dow Jones industrial average shot up 247.14 points, or 2.91 percent, to 8,726.61. The Standard & Poor’s 500 Index gained 30.29 points, or 3.53 percent, to 887.68. The Nasdaq Composite Index jumped 67.37 points, or 4.60 percent, to 1,532.10.


The S&P’s four-day advance is its best run since May.

U.S. investors did not react, traders said, to news reports of multiple attacks in India’s financial capital Mumbai, in which at least 80 people were killed.

A 7.2 percent surge in the price of oil futures lifted energy shares, making Chevron and Exxon Mobil Corp the biggest contributors to the Dow’s advance.

Chevron rose 4.4 percent to $79.93 and Exxon Mobil climbed nearly 4 percent to $80.89. U.S. front-month crude gained $3.67 to settle at $54.44 a barrel.

Dreary economic data included government reports that showed orders for costly manufactured goods such as refrigerators and washing machines, known as durable goods, plummeted in October, while consumers cut spending at the steepest rate in more than seven years.

Citigroup jumped nearly 16 percent to $7.05 on the NYSE after news late on Tuesday that a Mexican brokerage controlled by billionaire Carlos Slim recently bought $150 million worth of shares in the struggling U.S. bank.


Shares of Apple Inc climbed 4.6 percent to $95, making the iPod and iPhone maker the Nasdaq’s top-weighted advancer.

Cisco Systems, a networking equipment maker, rose 6.3 percent to $16.39 on Nasdaq, a day after news of a five-day plant closure led a tech sell-off as it sparked jitters over faltering demand.

Volume was fairly healthy on the New York Stock Exchange, especially on the day before the Thanksgiving holiday, where about 1.42 billion shares changed hands, below last year’s estimated daily average of 1.90 billion. On the Nasdaq, about 2.00 billion shares traded, slightly below last year’s daily average of 2.17 billion.

During the holiday-shortened week, volume typically is lighter than average.

Advancers outnumbered decliners by a ratio of almost 6 to 1 on the NYSE, while on the Nasdaq, about 4 stocks rose for every one that fell.

Editing by Jan Paschal

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