Updated from 4:06 p.m. EST
Stocks in the U.S. rose off their lows and turned sharply higher into Thursday's close, erasing early losses that had been spurred by a sharp rise in unemployment numbers and discouraging news from the retail, auto and technology sectors.
Dow Jones Industrial Average
, which earlier in the day lost 313 points to sink below 8000, rocketed 552.59 points, or 6.7%, to end the volatile day at 8835.25. The
soared 58.99 points, or 6.9%, to 911.29, and the
surged 97.49 points, or 6.5%, to 1596.70.
A number of factors were conspiring against the averages. However, once the major indices hit their worst levels of the session, the situation changed dramatically.
Robert Pavlik, chief investment officer at Oaktree Asset Management, said that after the S&P 500 got down to an intraday low of 818.69, buying interest was sparked. Pavlik said that although reports suggested that large institutional purchases of the
ETF stirred the rally, he didn't fully agree with that assumption.
"Whatever it is, it supported the market," he said. "I'll take it right now."
However, Pavlik remained skeptical of the afternoon's bullish reversal. "We're being led by energy and materials and telecom. How far is that going to take you is the question. It ain't going to take you that far."
The news of the day offered few reasons to indicate equities should rally, but nonetheless bargain-hunters were appearing for one of the few times all week.
This time around, traders received a report from Labor Department indicating that jobless claims for the week ended Nov. 8 came in at 516,000, above economists' estimates of 479,000 and breaking above 500,000 for the first time since 2001. The jobless figure from the previous week was also revised upward to 484,000 from 481,000.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said that the Labor Department doesn't seem to have cited one-time causes for the jump in unemployment claims, so it's probably safe to say there has been an actual increase in layoffs.
"Assuming it is mirrored in a reduced pace of gross hirings too, this means we can look forward to a further deterioration in the payroll numbers," he wrote.
Brian Bethune, director of financial economics at Global Insight Economics, agreed, saying that weakness in the retail sector will put a damper on seasonal hiring. "Clearly the economy is not doing well." He also said that there has been a pattern of undercounting layoffs in the financial area, and revisions have pushed those numbers even higher.
Meanwhile, the Census Bureau announced that the September trade balance registered a deficit of $56.5 billion, below analysts' forecast of $57 billion and down from a $59.1 billion deficit in August.
wore on, RealtyTrac reported that 84,868 homes were foreclosed on in October, a 25% increase from the year-ago tally.
Corporate earnings reports also pointed to more pain on the horizon. Retail giant
reported a rise in third-quarter profit, but said its performance for the remainder of its fiscal 2009 would be hurt by currency fluctuations. Shares rose 4.4% to $54.93.
Bruce Bittles, chief investment strategist at R.W. Baird, said that Wal-Mart's forecast does not add much new information to the market. "I think everybody knows the consumer's in trouble," he said.
From a technical standpoint, as the market drifts closer to its October lows, Bittles said he's concerned that the market has shown complacency as opposed to the fear that would precede a rebound. "Maybe before the market does turn, we've got to make a slightly lower low," he said.
Financial stocks also held the spotlight again.
The Wall Street Journal
board, unhappy about the banking titan's recent results, was considering replacing its chairman, Sir Win Bischoff.
However, Citi's board of directors said in a press release that Bischoff had its full backing and called the
report "completely erroneous." Citi ticked down 2% to $9.45.
The list of companies applying for government assistance expanded when
petitioned to become a bank holding company and requested funds from the Treasury. Earlier this week,
sought similar refuge.
CIT climbed 26% to $4.24, and American Express shares jumped 3.6% to $20.78.
As for the automotive sector,
reported that beleaguered
was hitting a snag in its efforts to sell $4 billion in assets to raise its cash levels. Several lawmakers have begun discussing whether GM, along with
, needs a government bailout.
GM stock lost 4.2% to $2.95, while Ford edged up 3.3% to $1.90.
In the technology arena, chipmaker
cut its fourth-quarter revenue forecast on weakening demand. Intel shares gained 6.7% to $14.43.
Elsewhere among semiconductor firms,
announced a sharp decline in its fiscal fourth-quarter earnings and said it would eliminate 1,800 jobs next year. Shares climbed 14% to $11.37.
Also looking to cut costs was telecom firm
, which is issuing buyout packages to some employees. The stock rose 15% to $2.24.
German industrial conglomerate
, meanwhile, announced a widened quarterly loss on charges related to job cuts and money dedicated to costs stemming from a bribery investigation. Shares added 15% to $56.71.
, Jefferies initiated coverage of American Express with an underperform rating. PC maker
caught a Goldman Sachs downgrade to sell, and Credit Suisse cut its price target for
to $120 from $135.
Dell shares stumbled 2.2% to $10.27, while Apple tacked on 7% to $96.44.
In commodities, crude oil added $2.09 to close at $58.24 a barrel. Gold shed $13.30 to settle at $705 an ounce.
Longer-dated U.S. Treasury securities were falling in price. The 10-year note was down 1-1/32, yielding 3.86%, and the 30-year was losing 3 points to yield 4.35%. The dollar was strengthening vs. the yen, but softening against the euro and pound.
Following weeks of declines in borrowing costs, credit markets tightened a bit Thursday. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, edged up 2 basis points to 2.15%. Overnight Libor likewise climbed 2 basis points to 0.4%.
Across the seas, European exchanges were mixed, as the FTSE in London traded lower, while the DAX in Frankfurt was logging gains. In
, Japan's Nikkei and Hong Kong's Hang Seng closed with losses.