- Title: USA: Wall Street races back on bargain hunting
- Date: 12th August 2011
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (AUGUST 11, 2011) (REUTERS) (SOUNDBITE) (English) TONY DWYER, CHIEF EQUITY STRATEGIST AND DIRECTOR OF U.S. EQUITY RESEARCH, COLLINS STEWARD, SAYING: "This is all about Europe. It really started with the whole periphery debt economies and countries looking like they're going to default on their debt. Eventually, it's landed in France, which is worried about the Italy exposure. Until you resolve the problems with the European debt, we're going to continue to have these crisis."
- Embargoed: 27th August 2011 13:00
- Keywords:
- Location: Usa, Usa
- Country: USA
- Topics: Economy
- Reuters ID: LVAEQK75HNF9T8M1CETEINLAN8S4
- Story Text: U.S. stocks rebounded, up 4 percent or more on Thursday (August 11) as investors hungry for bargains overcame the recent wave of fear that has driven selling over the last two weeks.
Thursday's rally marked the second bounce in a yo-yo week. After a sell-off that has pushed the S&P 500 down as much as 17 percent since July 22, the market is showing some signs of regaining its footing.
Investors used results from Cisco and a slight dip in weekly U.S. jobless claims as the catalyst to snap up beaten-down stocks. Worries about the spread of the European debt crisis were also somewhat alleviated after news of a meeting between France's Nicholas Sarkozy and Germany's Angela Merkel set for Tuesday.
"People are trying to look at weekly employment claims and proving in Cisco's better than expected numbers is the reason we're up today," said Tony Dwyer, Chief Equity Strategist and Director of U.S. Equity Research at Collins Stewart.
"We're up today because there's been stabilization in the European economies or at least European stock markets and especially the bank stocks."
Financials outpaced other S&P sectors after leading losses in the previous session, but analysts said they still awaited a bottom for the recent correction that has taken the S&P 500 down more than 14 percent since its April 29 highs.
However, bank borrowing costs were under some pressure overseas.
"This is all about Europe. It really started with the whole periphery debt economies and countries looking like they're going to default on their debt. Eventually, it's landed in France, which is worried about the Italy exposure. Until you resolve the problems with the European debt, we're going to continue to have these crisis," Dwyer told Reuters.
The CBOE Volatility Index, known as the VIX, shed about 8 percent, but remained near levels not seen in over a year, while the day's trading volume was at 12.88 billion, well above the year's estimated daily average of 7.8 billion.
The Dow Jones industrial average surged 423.37 points, or 3.95 percent, to 11,143.31. The Standard & Poor's 500 Index shot up 51.88 points, or 4.63 percent, to 1,172.64. The Nasdaq Composite Index jumped 111.63 points, or 4.69 percent, at 2,492.68.
While indexes showed solid gains on Thursday, the S&P 500 has fallen for 11 of the past 14 sessions, indicating the selling pressure may not yet be exhausted.
Among sectors, the S&P financial index jumped 6.3 percent, while the semiconductor index gained 5.2 percent. Another top advancer was the Dow Jones Transportation Average, up 4.3 percent.
Labor Department data showed new U.S. claims for unemployment benefits dropped to a four-month low last week, a dose of better news for the market after last week's U.S. credit-rating downgrade and a recent spate of soft economic data.
Shares of Cisco leaped 16 percent to $15.92 (USD). - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None
