Stocks Rebound, Fueled by HP Earnings

Wall Street broke a two-day losing streak yesterday despite poor housing and economic data that reinforced concerns of a long recession.

The Dow Jones industrial average was up 1.83 percent, or 151.17 points, to close at 8424.75. The gain still leaves the index down 9.8 percent this month. The Standard & Poor's 500-stock index was up 0.98 percent, or 8.37 points, to 859.12, while the tech-heavy Nasdaq composite index was up 0.08 percent, or 1.22 points, to close at 1483.27.

Stocks spent most of the day fluctuating between slight gains and losses before staging a late-day rally.

Investors were cheered by better-than-expected earnings from Hewlett-Packard, the world's largest computer maker. That helped buoy the technology sector, which has suffered from grim expectations and plunging profits from some of the sector's largest players, including Nokia and Sun Microsystems.

HP was the best performing stock in the S&P and Dow, trading up 14.49 percent to close at $33.59 a share.

By contrast, auto stocks fell as investors waited for progress on a $25 billion emergency bailout bill for the industry, which has run into resistance from congressional Republicans and the Bush administration.

Executives from Detroit's Big Three automakers stressed the need for the bailout before a Senate committee hearing yesterday. General Motors has already said it could run out of money next year, and Chrysler Chairman Robert L. Nardelli told the committee his firm also needs access to emergency loans from the federal government to stay afloat.

General Motors closed down 2.8 percent at $3.09, making it the biggest loser on the Dow. Ford was down 2.3 percent to close at $1.68 a share. Chrysler is privately held.

Investors also grappled with more poor economic data yesterday. Median home prices fell to $200,500 in the third quarter, down 9 percent from a year earlier, according to National Association of Realtors data. Foreclosures and other types of distressed sales made up 35 percent to 40 percent of home sale transactions during the quarter.

Meanwhile, wholesale prices fell by 2.8 percent in October, according to Labor Department data. The drop in the producer price index was larger than analysts expected, driven by the decline in energy prices. That was the single largest decline on record as demand for commodities came to a "virtual halt as the global economy skidded into recession," Joseph Brusuelas, chief economist for Merk Investments, said in a research note.

Crude oil prices were down about a half percent to $54.39 a barrel.