Wall St. Shrugs Off Jittery Opening To Start Week With Modest Gain
Tuesday, February 12, 2008
NEW YORK, Feb. 11 -- Wall Street finished higher in an uneasy session Monday as retail and home-builder stocks rose on expectations for more interest rate cuts.
The Dow Jones industrial average rose 57.88, to 12,240.01. The Standard & Poor's 500-stock index rose 7.84, to 1339.13. The Nasdaq composite index rose 15.21, to 2320.06.
Bond prices rose Monday. The yield on the benchmark 10-year Treasury note fell to 3.61 percent from 3.65 percent late Friday.
The Federal Reserve has been in rate-cutting mode this year, and it is expected to lower the federal funds rate once more either this month or at its next regularly scheduled meeting March 18.
"A number of sectors like retail and housing stocks have done better since the Fed acted, and they are leading the market again today," said Steve Goldman, chief market strategist at Weeden. "These stocks are called early bellwethers, and they tend to lead a recovery."
Investors continued to grapple with bad news in the credit markets. The stock market fell in early trading and remained volatile even after recovering, with Wall Street concerned that American International Group might have more mortgage debt to write off.
Though Wall Street managed a gain Monday despite AIG's report, many analysts think there is bad news yet to come in the credit markets that could have more deleterious effects on the stock market and the broader economy.
"The absolute seizure of the credit markets in the corporate arena is going to put enormous pressure on American companies," said George Feiger of Contango Capital Advisors. "And this is really bad news for the economy."
AIG fell $5.94, to $44.74.
Hasbro rose 54 cents, to $26.41. Fourth-quarter profit rose 24 percent.
Yahoo rose 67 cents, to $29.87. The board rejected a $44.6 billion takeover offer from Microsoft over the weekend.
Microsoft fell 35 cents, to 28.21.
Motorola rose 31 cents, to $11.57. The telecom firm is in talks with Nortel Networks to merge their wireless infrastructure businesses.
Nortel fell 18 cents, to $10.89.