NEW YORK – Exxon Mobil Corp. and other energy companies led stocks higher Tuesday as major indexes rose for the second day in a row.
Exxon rose the most of the 30 stocks in the Dow Jones industrial average, gaining 3.2 percent. Chevron Corp. was also up more than 3 percent. Energy stocks got a push upward from a 2 percent increase in the price of oil, to $85 a barrel.
Bank of America Corp. sank 2.7 percent, the most of any Dow company. The stock has lost 36 percent this month as investors become increasingly worried about the bank's ability to raise capital and its liabilities related to subprime mortgages. The latest disappointment came Monday with news that BofA will not sell its 10 percent stake in China Construction Bank.
Stocks rose broadly despite another weak report on the U.S. housing market. The Commerce Department said the number of people who bought new homes in July fell 1 percent, the fourth monthly drop. New home sales are on track to have their worst year in half a century.
In early afternoon trading, the Dow rose 208 points, or 2 percent, to 11,063. The Dow also rose 200 points in morning trading Monday, but ended with a gain of just 37.
The S&P 500 index rose 24 points, or 2.1 percent, to 1,148. The Nasdaq rose 58 points, or 2.4 percent, to 2,403.
James Paulsen, chief investment strategist at Wells Capital Management, said Tuesday's gains seemed fragile because stock trading has been so volatile. "But at least we're going up and down, not just down," Paulsen said. "Every day this goes on you get the sense that maybe we've found the bottom."
Major indexes eked out minor gains Monday following a four-week losing streak. During that time there were four days in a row in which the Dow Jones industrial average moved by at least 400 points, the first time that has happened in the Dow's 115-year history.
The S&P 500 index has dropped 16 percent since July 22 and 13 percent this month as investors worry about the U.S. economy softening and a flare-up in Europe's debt crisis. The broad market measure is on track for its worst August since the Asian financial crisis rattled world markets in 1998.
One measure of the market's swings, the Chicago Board of Options Exchange's volatility index, has soared 54 percent this month. That's a sign investors are anticipating more wide swings in the S&P 500, the stock index most money managers use a benchmark. The index fell 8 percent Tuesday to 39 as concerns about future turbulence eased.
UBS rose 4 percent. The Swiss bank said it planned on cutting 3,500 jobs worldwide in the hope of saving $2.5 billion by the end of next year. UBS's stock has dropped 20 percent this year.
H.J. Heinz Co. fell 3 percent after the world's largest ketchup maker said profits fell 6 percent in the most recent quarter. Heinz also lowered its earnings estimate for the year.
Better reports on manufacturing in Europe and China lifted world markets. Hong Kong's Hang Seng rose 3 percent and Germany's DAX rose more than 1 percent. Investors are also hoping Fed Chairman Ben Bernanke will announce some kind of assistance Friday for the U.S. economy.
There's still fear that the U.S. could slip into another recession. Investors will be watching Bernanke's speech at the Fed's annual retreat in Jackson Hole, Wyo., on Friday. It was at the same conference a year ago that Fed Chairman Ben Bernanke made the case for buying Treasury bonds to push interest rates lower and spur spending. That $600 billion bond-buying program was credited with giving stock markets a lift but it ended in June.
The yield on the 10-year Treasury note edged up to 2.11 percent from 2.10 percent late Monday. The yield fell below 2 percent last week, its lowest on record, as investors sought refuge from turmoil in the stock market.
Gold, which edged above $1,900 Monday, fell $33 to $1,859 an ounce. Gold has jumped 15 percent this month to new highs as nervous investors shift money into hard assets.
No comments:
Post a Comment