Jordan bombings wipe Wall street gains
Bombings at three hotels in Jordan erased most of an afternoon rally on Wall Street today, leaving stocks with only marginal gains as the market’s fears about terrorism resurfaced.
The day ended with stocks down sharply. Before the bombings, stocks had advanced modestly as investors hoping for a fourth-quarter rally did their best to create one.
The morning’s declines triggered short-covering and program buying. Stocks were also boosted by portfolio churn as managers took profits where they could and moved into other equities.
The Dow Jones industrial average rose 6.49, or 0.06%, to 10,546.21.
Broader stock indicators were slightly higher. The Standard & Poor’s 500 index rose 2.06, or 0.17%, to 1,220.65, and the Nasdaq composite index rose 3.74, or 0.17%, to 2,175.81.
Bonds fell sharply, with the yield on the 10-year Treasury note rising to 4.65% from 4.55% late yesterday. The US dollar was mixed against other major currencies, rising near a two-year high against the euro on concerns about violence in France and political uncertainty in Germany. Gold prices rose.
Crude oil futures fell. A barrel of light crude was quoted at US$58.90 (€50.06), down 78 cents, in trading on the New York Mercantile Exchange.
Stocks remain nearly flat for the year and strategists are split between those who think a fourth-quarter rally is almost certain and those who recommend investors shift capital away from stocks and toward cash and bonds.
William Hummer, chief economist at Wayne Hummer Investments, is in the first group. He argues that steady interest rates, solid earnings and a strengthening US dollar will propel the market higher.
By contrast, Merrill Lynch’s US Strategy report for November said: “Cash obviously beats our expected return” for the S&P 500.
Wednesday’s only meaningful economic release was the mostly ignored wholesale inventories. On days when news is thin, the market can move merely because one group has decided to make their play.
The Russell 2000 index of smaller companies rose 3.60, or 0.55%, to 659.83.
Advancing issues led decliners by nearly 8 to 7 on the New York Stock Exchange, where volume was 1.61bn, up from 1.41bn at the same time yesterday.
