Market’s Wild Ride Continues: Dow Closes Up 423 Points
- Posted on August 11, 2011 at 4:35pm by
Tiffany Gabbay
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NEW YORK (The Blaze/AP) — Stocks are rising at the close of trading after investors latched onto some small signs that the economy might not be headed into another recession.
Fewer Americans joined the unemployment line last week, and a technology bellwether said revenue could grow faster this quarter than analysts expected. The news is pushing down prices on long-term Treasurys down, and gold is down from its record high.
The Dow Jones industrial average is up 423 points Thursday, or 3.9 percent, to 11,143. It’s the first time the Dow has ever had four straight 400-point days.
The S&P 500 is up 51, or 4.6 percent, to 1,173. The Nasdaq is up 111, or 4.7 percent, to 2,493. All three major U.S. stock indexes are down at least 1.6 percent for the week.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (The Blaze/AP) – Wall Street’s wildest week since 2008 continued with another 400-plus point move for the Dow on Thursday. This time, stocks shot up after investors saw small signs that the economy might not be headed into another recession.
Fewer Americans joined the unemployment line last week, and a technology bellwether said revenue could grow faster this quarter than analysts expected. The news pushed prices on long-term Treasurys down, and gold fell from its record high.
The Dow Jones industrial average rose 549 points, or 5.1 percent, to 11,269 at 3:45 p.m. in New York.
During a calm market, a 400 point move would rank as the Dow’s biggest in months. During this volatile week, it’s the smallest. On Monday, The Dow plunged 634 points only to gain 429 points Tuesday and then sink 519 points Wednesday. If the Dow stays above 400 points through today’s close, it would be the first time in its history that it had four-straight 400-point days.
Such big up-and-down swings are reminiscent of 2008, when the financial crisis battered stocks. The last time the Standard & Poor’s 500 index rose or fell by 4 percent in four straight trading days, as it has just done, was Nov. 19, 2008 through Nov. 24, 2008. Over that span, the index went from down 6.1 percent to down 6.7 percent to up 6.3 percent to up 6.5 percent.
Carlton Neel, who manages about $2 billion as a senior portfolio manager at Virtus Investment Partners said investors are so scared of being the last one out of the market in a downturn or the last one in during a rally that they are stampeding in herds, creating more volatility.
“Fear tends to be a much more powerful emotion, and the sell-offs tend to be more violent than the rallies,” he said. “But people are worried about missing the bottom, so you will have a few melt-ups along the way.” That’s because memories of the last meltdown in 2008 are still fresh in the mind of many investors.
In October 2008, the Dow rose and fell by more than 400 points four times each. That includes a 936 point surge on Oct. 13 after European central banks pledged more aid to banks and the U.S. Treasury offered more details about how it would help U.S. banks. Two days later, when a report showed retail sales had fallen more than anticipated, the Dow dropped 733 points.
On Friday, the government will say how much people spent at retailers during July. Economists expect a 0.4 percent rise, according to FactSet.
The S&P 500 rose 64 , or 5.8 percent, to 1,185. It was the fourth straight day the index rose or fell by 4 percent. That hasn’t happened since Nov. 19-24, 2008 when it rose by at least 6.1 percent for two straight days and then fell by at least 6.3 percent for two more days.
Thursday’s gain came after the government said the number of people filing for unemployment benefits for the first time fell to 395,000 last week, down 7,000 from a week earlier. It’s the first time the number has dropped below 400,000 in four months.
Analysts said it may be a sign that the job market is slowly improving after its three-month slump. Job growth slowed to an average of 72,000 in May, June and July. In the previous three months, employers added 215,000 jobs per month, on average.
“It‘s the first scrap of economic data we’ve had recently that says the idea that we’re going into another recession may be overdone,” Neel said.
In the last few weeks, investors have grown more worried about the economy. The government said last month that it grew at its slowest pace in the first half of 2011 since the recession ended in 2009. Unemployment is still above 9 percent.
The Nasdaq composite index rose 133, or 5.6 percent, to 2,514.
Technology stocks helped lead stocks higher. Cisco Systems Inc. profit for the latest quarter topped analysts’ expectations. Cisco is considered a bellwether for the tech industry because it is the world’s largest maker of computer networking equipment. The company also said revenue may grow more quickly in the current quarter than analysts were anticipating. Cisco rose 15.9 percent. As a group, tech stocks in the S&P 500 rose 3.6 percent.
Financial stocks also rebounded from their steep drop Wednesday, up 4.3 percent after a 7.1 percent drop a day earlier.
Media conglomerate News Corp., which owns Fox News and The Wall Street Journal, rose 18.9 percent. Its earnings, reported late Wednesday, were stronger than analysts expected.
Department store chain Kohl’s Corp. rose 7.9 percent after it said profit rose 17 percent last quarter on stronger sales of store-label brands.
Investors had been largely ignoring the strong profits that companies have reported since July. For the 452 companies in the S&P 500 that have reported second-quarter results so far, overall earnings are up 12 percent. Instead, investors have focused on worries about the weak U.S. economy and Europe’s debt problems.
The leaders of France and Germany, the biggest Eurozone economies, said they will meet next week to talk about how to solve the region’s financial difficulties. Worries that the continent’s debt problems could hurt the banks that own European government bonds have weighed heavily on financial stocks and the broader market. Pain for European banks could lead to more trouble for the U.S. banking industry and the economy because global financial firms are so closely linked.
Reports also circulated that European officials were considering a temporary ban on selling stocks short, which is a way that traders bet a stock will fall.
Rumors have been a force driving the market in the last week. On Friday, speculation that Standard & Poor’s may downgrade the U.S. from its top AAA credit rating helped knock down stocks. It turned out to be correct.
This week, speculation has centered on European banks, French ones in particular. The head of France‘s central bank said Thursday that the country’s banks are solid, and he blamed “unfounded rumors” for big drops in their stocks.
Prices for longer-term Treasurys fell, as investors felt less need to put their money in investments considered safe. The yield on the 10-year Treasury note rose to 2.27 percent from 2.11 percent late Wednesday. A bond’s yield rises when its price falls.
Investors had been pouring into Treasurys earlier in the week, and they briefly knocked the 10-year yield to a record low of 2.03 percent Tuesday afternoon. Treasurys have held onto their reputation as a safe place to put money even after S&P cut the U.S. credit rating to AA+.
Gold also benefited early this week from buyers looking for something safe. It rose above $1,801 per ounce for the first time on Wednesday as stock markets tumbled around the world. But it fell to settle at $1,751.50 on Thursday.
CME Group raised the amount of money that investors must put up to buy a gold contract on its COMEX exchange by 22 percent late Wednesday.
The Vix index, a measure of investors’ fear, fell 11.8 percent to below 40. The index shows how worried investors are that the S&P 500 will drop over the next 30 days. It does that by measuring prices for stock options that investors buy to help protect their portfolios.
The Vix, though, is still nearly 30 percent above where it was in early July and remains up for the week.
The Dow’s climb on Thursday pulls the average further away from bear market territory: The Dow ended Wednesday 16.3 percent below its high for the year, reached on April 29. A drop of 20 percent would mean the bull market that began in March 2009 has turned into a bear, a long period of stock declines.
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Comments (55)
progressiveslayer
Posted on August 11, 2011 at 7:33pm@seeker9 any chance the dollar will lose it’s reserve currency status? Curious as to your thoughts.
Report Post »avenger
Posted on August 11, 2011 at 7:41pmthe USA dollar is DEAD man walking….thank the progressives & obummer…
Report Post »seeker9
Posted on August 11, 2011 at 7:45pmReally don’t know. There have been rumblings that it may happen, particularly from our creditors. That would really blow Krugman’s economics to kingdom come. My best guess for now is 85% chance of staying reserve currency.
Report Post »progressiveslayer
Posted on August 11, 2011 at 8:22pm@seeker9 Thanks,the IMF thinks China‘s economy will eclipse ours by 2016 maybe shortly after we’d lose reserve currency status.I’m in gold mining stocks for the long haul.
Report Post »seeker9
Posted on August 11, 2011 at 9:52pmThere are a lot of watershed events that could change everything. Like the “super congress”, but the 2012 elections is the biggie. If it goes BHO/Prog, I would change to 95% chance of losing reserve currency status (5% just because it would be highly disruptive to change). Gold/silver/miners should be at 10% of every portfolio, just for “insurance”.
Report Post »BurntHills
Posted on August 11, 2011 at 7:32pmjust yesterday there was a business article saying to BEWARE of the ” dead cat bounce”.
Report Post »JOE
Posted on August 11, 2011 at 7:29pmWhen i was a kid i use to go at a news stand at 605 at nite to pick up 2 news papers Both the new york post……………One man was looking at the final of the Market prices The other the Horse or Ponys which he bet every day …………He asked me why the other guy neeed the paper so i told him i showed him the page of the market and he told me this …………..BOY i been around a long time When u bet the market if you not a insider with the money you betting on something you never see run and will lose in end ……………He showed me his paper Showed me the Horses he bet he said see i collect tomorrow i know who won!!!!!!!!!!and ran ……….The market is a gambling mans game but it is big time investor that make the money they robbbed us before they will do it AGAIN ………….AND THE AGAIN IS COMING…………….
Report Post »Gypsy123
Posted on August 11, 2011 at 7:24pmCrash! She be coming!
Report Post »sWampy
Posted on August 11, 2011 at 7:08pmUp, Down, Up, Down, Up, Down, snap…
Report Post »That Guy
Posted on August 11, 2011 at 9:01pmUp, up, down, down, left, right, left, right, b, a select start
Report Post »cloudsofwar
Posted on August 11, 2011 at 7:02pmcnbc is hawking stocks tonight. all signs point up. buy buy buy tomorrow sell sell sell.
Report Post »trooper
Posted on August 11, 2011 at 6:45pmIt’s like the “Space Bucks” episode on South Park, how stipid can you be to value printed paper.
Report Post »I value food, water, guns and ammo that will be worth more than the paper they are printing and borrowing in due time.
seeker9
Posted on August 11, 2011 at 7:10pmAhhh! The pesky “time” parameter. That is the most difficult one of all to get right.
Report Post »lionslayer44
Posted on August 11, 2011 at 11:15pmi agree TROOPER, you cant eat gold. supplies are another investment. with the prices of food soaring buying at todays prices may also be a wise investment. BE PREPARED, COLLECT FOOD, WATER (FILTERS), AMMO!!! GOD BLESS AMERICA!!!
Report Post »trooper
Posted on August 11, 2011 at 6:41pmUp, down, sidways, north, south, east, west what does it matter it’s all imaginary money anyway you look at it.
Report Post »ezeewhiz
Posted on August 11, 2011 at 6:34pmJust wondering, is someone trying to make a mockery of the NYSE?
Report Post »cloudsofwar
Posted on August 11, 2011 at 6:28pmthe market is up today. tomorrow selling before the weekend,close lower. rollercoaster. oh well that be the stock market. well the trend line over time is UP at least. if BO stays in the trend line will be going the wrong way. get rid of BO and restore the free market.
Report Post »Texas Grasshopper
Posted on August 11, 2011 at 6:02pmtry taking a look over at Zero Hedge on this
http://www.zerohedge.com/news/belgium-france-italy-spain-overrule-european-regulator-impose-standalone-short-selling-bans
“ buying time ” was one comments way of pharsing this ….
Report Post »roadhog
Posted on August 11, 2011 at 5:58pmObamas Stock market No Confidents in a Marxist Pres.
Report Post »Bernard
Posted on August 11, 2011 at 5:46pmWith our downgrading of our credit to AA++ and unemployment is still endemic, housing values continue to drop and now I read that a student loan “bubble” is coming down. Add to that the yet to arrive “commercial bubble” only goes to show that even though we have dropped so much, there is still a long way to go to hit dirt
Report Post »But with our witless, senseless, saboteur President HUSSEIN Obama we may expect many more “bubbles” to fully destroy this nation for decades.
cloudsofwar
Posted on August 11, 2011 at 6:36pmstudent loan bubble. your right, no jobs for all of those students means no payments. i smell a bailout right before the election.
Report Post »TeaPartyPatriot
Posted on August 11, 2011 at 5:36pmTuesday’s and todays massive rallies are due to investors loving the fantastic economic policies of NO-PLAN obozo, bailout bernanke and the rest of the d-cRAT socialists.
Monday’s and yesterdays massive declines are due to investors hating the memory of george bush,the root cause of all of our problems.
Watch for this brilliant analysis in the lamestream socialist media near you.
Report Post »heyjim55
Posted on August 11, 2011 at 5:31pmIt’s up today but tomorrow is Friday and that is the day that bad things happen in Government and in the stock market. I will predict that Moodys will go with a lower rating as well and then wait for Monday’s freek out.
Report Post »cloudsofwar
Posted on August 11, 2011 at 6:31pmmoodys doesn’t want BO to look bad they will stay with AAA for now.
Report Post »SPOT_OF_TEA
Posted on August 11, 2011 at 5:28pmAfter massive losses,stocks up 500 points on the day of Republican debate….spooky dude to the rescue again.
Report Post »ChiefGeorge
Posted on August 11, 2011 at 5:27pmIt occurred to me today that these ups and downs are setting a false sense of buying into the dip. Once everybody buys into the next one (maybe this one) then they bring it all down and take their money out starting at the top. Investment Scam artists do this by promising a large return for some decent money up front. They deliver on it once maybe even twice. Then they get you to pony up a large investment of cash on a once in a life time deal then their gone with your money. The money they were paying you on the phony returns was someone elses investment cash. Got it. Get out now while you can.
Report Post »seeker9
Posted on August 11, 2011 at 5:49pmBuy the dips, sell the rips! Only you have control of your keyboard. The point is that if you have a profit, you can sell, do not wait for it to be driven down.
Report Post »seeker9
Posted on August 11, 2011 at 8:35pmOkay. I have been investing for a long time, and sometimes forget that most people probably do not have an e-account. I pay $7 for an on-line trade. No limits on share or dollar amounts, always $7. I do have to come up with the ideas, but I have no brokers calling me either. I really do not consider it gambling. Never been in a casino, or bet on football games. The 15% tax rate that so bother the Progs are available to everyone, not just to hedhe fund managers. Have done much better than a bank CD.
Report Post »AVATARBABY
Posted on August 11, 2011 at 5:10pmThe stock market has more severe up and down swings than Hugh Hefner on Viagra.
Report Post »gmoneytx
Posted on August 11, 2011 at 5:00pmit’s up, it’s down, it’s up, it’s down, I’m gonna puke!
Report Post »Canada_Goose
Posted on August 11, 2011 at 4:58pmThis must be a sad day over at FNC and Fox Business.
I am not even sure if they are reporting on the DJI today.
Even Mr. Beckel, the token progressive on their new 5 PM show, criticized FNC producers or not covering the DJI increase earlier this week.
It appears that FNC is now completely invested in the economic decline of the US. They even cheered the S&P downgrade.
I guess their thinking is if it’s bad for the US economy it’s bad for the Obama administration and therefore good for the GOP.
Report Post »seeker9
Posted on August 11, 2011 at 5:03pmWht in he** are you talking about?
Report Post »hauschild
Posted on August 11, 2011 at 5:20pmWe don’t care about that, because we know Obama is an absolute disaster.
What we’re trying to figure out now is the level of devastation amongst the business sector to determine if it even pays to invest in the market.
The way it looks, the down days sees investors being realistic towards the climate. The up days sees irrational exuberance at best.
Report Post »lovebunny
Posted on August 11, 2011 at 5:40pmOMG….be quiet
Report Post »progressiveslayer
Posted on August 11, 2011 at 7:30pmRight out of the dems playbook,probably the only one cheering the demise of capitalism is BO, that’s the fundamental transformation wealth redistribution the socialist drones on endlessly about.
Report Post »Uncurable wound
Posted on August 11, 2011 at 9:11pmIn the words of your own people-”Take Off ayyy,you hoser!”
Report Post »NWalters78
Posted on August 11, 2011 at 4:57pmAh, more of the Economic Kabuki Theatre. Somewhere out there, George Soros is laughing in delight. He shorted the market and made billions. And this week, the US was weakened even more ensuring some of Soros one-world liberal BS.
Again, thanks alot 2008 Obama voters.
Report Post »capecodsully
Posted on August 11, 2011 at 4:51pmThere is optimism in the air because Obama will be vacationing in shark infested waters soon.
Report Post »fatjack
Posted on August 11, 2011 at 5:02pmwuhahahahahaha now that’s funny.
Report Post »megansmom
Posted on August 11, 2011 at 4:50pmThe stock market is nothing more than a big old game of poker using companies instead of cards. Sometimes you win and sometimes you lose. And sometimes you tie.
Report Post »olddog
Posted on August 11, 2011 at 4:40pmThe markets gonna bump up and down a few times before the Big Crash, and some suckers are gonna get caught…
Report Post »seeker9
Posted on August 11, 2011 at 4:48pmYou can buy exchange traded funds (ETFs) that short the market and make a ton of money. Some are leveraged at 2x or even 3x. Just a few keystrokes gets the job done.
Report Post »lylejk
Posted on August 11, 2011 at 4:39pmI told you all yesterday that the market is going to rise some. Again, it’s following the classic underdamped response from control theory. See my 2 posts here:
http://www.theblaze.com/stories/dow-closes-down-by-519-points/comment-page-3/#comment-1657087
Report Post »seeker9
Posted on August 11, 2011 at 4:49pmSo, how much money did you make?
Report Post »lylejk
Posted on August 11, 2011 at 4:59pmnone; won‘t gamble since I can’t quite figure out the period of the response and knowing my luck, I would loose it all trying. The curve itself is obvious. Classic response of the macro trying to figure when to buy or sell when a correction occurs. Maybe you are a gambler and then can make big books (or loose as much), but I have to hold on to whatever money I can right now and not entertain my inklings on such things as the market. :)
Report Post »seeker9
Posted on August 11, 2011 at 5:22pmI try to manage risk. The higher the uncertainty, the lower my investment. Been going into dividend stocks as of late. I will accept some risk to earn 5-14% rather than a safe gauranteed 0.25%. Your original post sounded rather confident. Was just following up.
Report Post »lylejk
Posted on August 11, 2011 at 5:31pmNever can be 100% confident w.r.t. the market; again it’s gambling pure and simple. Sad that we depend so much on this for of gambling for our way of life. It wasn’t that long ago that many lost all their retirement because of the Enron/Arthur Anderson scandals (which pretty much was how I lost my Engineering job in Atlanta; 9/11 was just the final coup de grace). Still, the rolling of dice goes on. Good luck to those that continue to play. :)
Report Post »seeker9
Posted on August 11, 2011 at 5:44pmLike I said, risk management. Rule #1: NEVER, NEVER put everything into one investment. It is called diversification.
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