Markets Recover As Calm Prevails
Thursday, March 1, 2007
NEW YORK, Feb. 28 -- Just like the previous day, the opening of the U.S. markets Wednesday was preceded by disappointing economic news.
The markets did not blink, however, as the federal government reported that the economy was growing at a slower rate, and that sales of new homes plunged more than 16 percent in January, the biggest monthly percentage decline in 13 years.
Investors, analysts said, were instead more focused on Federal Reserve Chairman Ben S. Bernanke's congressional testimony and signs of stabilization in global markets, as the benchmark stock indexes in Shanghai and Shenzhen rose about 4 percent after their dramatic 9 percent drop Tuesday.
The Dow Jones industrial average, which fell 3.3 percent Tuesday, regained ground in fits and starts before closing at 12,268.63, up 52.39, or 0.43 percent.
The Nasdaq composite index closed at 2416.15, up 8.29, or 0.34 percent. The Standard & Poor's 500-stock index closed at 1406.82, up 7.78, or 0.56 percent.
The relative calm was palpable on the floor of the New York Stock Exchange, where traders watched the Dow inch up in early trading.
"So far so good," a trader said, flashing a colleague a smile before dashing off.
Others monitored screens that were no longer flashing bright red as the did the day before, and took a wait-and-see approach as prices fluctuated.
"It seems to be okay. But things can change any minute," said Doreen Mogavero of the brokerage Mogavero, Lee & Co., who placed orders on a transportation stock for a client who wanted 25,000 shares. "When we open like this, I want to wait to see if they come back a little bit."
Outside, a cluster of traders taking cigarette breaks grumbled about the technological difficulties in making trades quickly. They said that for about a 20-minute span Tuesday, from 3:40 to 4 p.m., the orders they had placed for customers were stuck in a queue.
It was unclear Wednesday whether the delays were related to a technological glitch that caused the Dow to plummet 200 points in a matter of minutes shortly before 3 p.m. Tuesday. The drop was caused when the system that calculates the average recorded a backlog of trades after the process was switched to a backup computer.
Down the street, traders at the American Stock Exchange complained of similar problems, and large brokerage firms also said they had trouble executing trades.