What goes down seemingly must go up
NEW YORK - Investors rode wild market swings on Wall Street for much of the week, and Friday was no different. The Dow Jones industrial average soared more than 250 points on a surging tide of strong earnings from General Electric and Textron, and an encouraging economic report.
NEW YORK - Investors rode wild market swings on Wall Street for much of the week, and Friday was no different. The Dow Jones industrial average soared more than 250 points on a surging tide of strong earnings from General Electric and Textron, and an encouraging economic report.
It was the latest big move for a market which has been on a mostly downward track. Stocks have had four weeks of declines, leaving the Standard & Poor's 500 index 6 percent below the record high it set Sept. 18.
The Dow Jones industrial average plunged as much as 460 points on Wednesday, then had one of its best days of the year Friday.
"We had indiscriminate selling all week, and then today we had indiscriminate buying," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
Market watchers have warned investors to expect more volatility, reflecting heightened concerns about weaker growth in Europe and what it could mean for U.S. corporate profits.
The turmoil has not been limited to the New York Stock Exchange. Bonds, overseas markets, and commodities prices have all had big moves this week.
"Most of the swings this week were related to fears about global growth and not about the fundamentals of this market," said James Liu, global market strategist at JPMorgan Funds.
The VIX, a measure of how much volatility investors expect in stocks, has risen from 12 in mid-September to as high as 31 this week, above its historical average of around 20. That's still far below the readings of 80 it had at the height of the 2008 financial crisis.
The Dow advanced 263.17 points, or 1.63 percent, to 16,380.41 Friday. The Standard & Poor's 500 index rose 24 points, or 1.29 percent, to 1,886.76 and the Nasdaq composite rose 41.05 points, or 0.97 percent, to 4,258.44.
Investors rallied behind a group of corporate earnings results.
GE rose 2.4 percent after the company reported third-quarter earnings that beat analysts' forecasts, citing improved performance in its aviation and oil and gas divisions. GE businesses cover so many parts of the economy, from banking to building nuclear reactors, that investors see its results as a bellwether for how industry is doing. GE rose 57 cents to $24.82.
Textron, another conglomerate, had the second-biggest gain in the S&P 500 index after its earnings came in far ahead of what analysts were expecting. Textron rose $2.99, or 9 percent, to $36.65.
A survey by the University of Michigan showed consumer sentiment unexpectedly rose last month to 86.4, much higher than the 84.3 expected by economists. It was the highest reading for that survey since July 2007, right before the recession began.
