Stocks reverse losses as commodities rise
NEW YORK - Stocks reversed steep losses in the final hour of trading yesterday to end little changed. The Dow Jones industrial average recovered from a 130-point slide to end up a little more than 1 point.
NEW YORK - Stocks reversed steep losses in the final hour of trading yesterday to end little changed. The Dow Jones industrial average recovered from a 130-point slide to end up a little more than 1 point.
The day offered little economic and corporate news to guide investors. Add in light trading volume, and traders said the mix was right for volatility.
Stephen Carl, head of equity trading at The Williams Capital Group in New York, said the light volume made the market susceptible to quick changes in direction.
Falling commodities prices had spooked investors earlier yesterday, but prices for key industrial materials closed off their lows for the day, providing some relief to the stock market.
The Dow rose 1.36, or less than 0.1 percent, to 8,764.49. The Standard & Poor's 500 index slipped 0.95, or 0.1 percent, to 939.14, and the Nasdaq composite index fell 7.02, or 0.4 percent, to 1,842.40.
Commodities producers, including Alcoa Inc. and Freeport-McMoRan Copper & Gold Inc., weighed on the market much of the day.
Like stocks, commodities have been rallying on expectations of an economic recovery. Demand for commodities would likely increase as the economy strengthens.
Yesterday's pullback in commodities prices was also due in part to strength in the dollar, which can hurt demand for raw materials by making them more expensive.
Aluminum producer Alcoa fell 17 cents to $10.77, while Freeport-McMoRan slid 68 cents to $56.48.
Light, sweet crude fell 35 cents to settle at $68.09 per barrel on the New York Mercantile Exchange.
Investors were also cautious ahead of the latest report card on banks. The government is expected to announce this week which banks will be allowed to return bailout funds. JPMorgan Chase & Co., Goldman Sachs Group Inc. and American Express Co. are expected to get approval to repay their loans, according to The Washington Post.
JPMorgan rose 84 cents, or 2.4 percent, to $35.39, while Goldman fell 66 cents, or 0.4 percent, to $148.35. Amex rose 70 cents, or 2.8 percent, to $25.65.
The Russell 2000 index of smaller companies fell 5.57, or 1.1 percent, to 524.79.
Major European markets fell. Britain's FTSE 100 fell 0.8 percent, Germany's DAX index slid 1.4 percent, and France's CAC-40 dropped 1.5 percent. In Asia, Japan's Nikkei stock average finished with a gain of 1 percent.