Thursday's Market: Stocks End Higher, Rebounding From Recent Weakness
(Updated from 4:07 p.m. EDT)
Investors gave the market the benefit of the doubt today, buying stocks in the hopes of aggressive monetary policy and bargain-basement prices. No other news spurred today's rally.
Still, the
Dow Jones Industrial Average gained 68.1 points, or 0.64%, to 10,715.43; it was down 49.7 points at one point today. The
Nasdaq Composite advanced 27.5 points, or 1.4%, to 2058.7; it was off 15.3 points this morning. The
S&P 500 climbed 13.9 points, or 1.1%, to 1237.04.
Some analysts said the market was ready for a bounce: "It was oversold and due for a snapback," said Brian Belski, fundamental market strategist at
U.S. Piper Bancorp Jaffray
. "There was no other market catalyst today, other than the fact that stocks have been beaten up so badly."
The markets have been in a choppy range this week as investors digested the latest earnings warnings and awaited the
Federal Open Market Committee meeting on June 26-27, when the Fed is expected to lower interest rates by at least another 25 basis points.
Fed fund futures, a good proxy for monetary policy, are pricing in 100% odds of a 25 basis-point cut and a 40% chance of a 50 basis-point cut.
"People are getting excited going into next week's Fed meeting," said Sam Ginzburg, senior managing director of equity trading at
Gruntal
. "But it's a tug of war on the marketplace." Ginzburg is concerned about market gains in the wake of gloomy forecasts.
The
initial jobless claims for the week ending June 16, released by the
Labor Department
this morning, showed some strength in the labor market. The number of first-time claims fell 34,000 from a week ago, to 400,000. Economists had forecast that the requests for state unemployment insurance benefits would come in at 423,000.
Analysts said the jobless data, along with a better-than-expected earnings report from
Morgan Stanley
(MWD)
, gave a lift to blue-chip stocks. The investment bank rose 9.4% to $64.95, even though profits declined 34% from year-ago levels. The
Philadelphia Stock Exchange/KBW Bank Index
closed up by 3.5%.
But other stocks were under pressure after earnings warnings.
Transmeta
(TMTA)
, which said its second-quarter sales would fall 40% to 45% from first-quarter results, cratered 57.5% to $5.36. In April, the company had forecast that revenue would be little changed or higher.
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