(Updated with stock prices.)
NEW YORK (TheStreet) -- The major stock averages recovered after another volatile day Monday as the market goes through what one observer calls a transition period.
The Dow Jones Industrial Average gained 76.71 points, or 0.8%, to 9789.44, while the S&P 500 added 6.69 points, or 0.7%, to 1,042.88. The Nasdaq edged up 4.09 points, or 0.2%, to 2049.20.
Stocks advanced early after a trio of positive surprises economic reports, but gave up those gains by midday only to recover with a buying spree in the final hour."We are going through a transition," says Jeffrey Kleintop, chief market strategist, LPL Financial. "In the summer we were going from pricing in the great depression to a recession, now we've been here for a month and a half as we go from pricing in a recession to a recovery," he says. "We're in this consolidation around 1050 [on the S&P 500], and it may go a few more weeks, but we've seen a lot of volatility, and it's tough to put your finger on what drove that," he added. The CBOE volatility index, considered a reading on fear in the market, was at times above 30, a level that raises some eyebrows. Adding to the midday pressure, Jon Greenlee, associate director of the Fed's Division of Banking Supervision and Regulation, said U.S. banks are at risk of large new loan losses, particularly on commercial property. Greenlee said in prepared testimony prepared for a House of Representatives Oversight and Government Reform subcommittee that some banks may not have adequate capital to cushion against losses, CNBC reported. The dollar also fought to recover from early weakness, leading to some midday selling.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV