Stocks rebound after Tuesday's big slide

The Dow jumped 89 points to close at 12805, a stark turnaround from yesterday's free-fall.

By , AP Business writer

  • close
    Traders work on the floor of the New York Stock Exchange April 11, 2012. Stocks rebounded Wednesday after suffering huge losses the day before. The Do rose 89 points.
    View Caption

Investors on Wednesday all but forgot the previous day's burdens and sent stocks soaring. It was a stark turnaround from the day before, when they'd pushed the market into a free-fall on worries about European debt and corporate earnings in the U.S.

Those fears about problems festering on both sides of the Atlantic were calmed thanks to a surprising profit from Alcoa and news that borrowing costs in Spain had edged down, a potential sign that investors have more faith — for now, anyway — in that country's financial health.

The result was a U-turn on Wall Street. The Dow Jones industrial average climbed as much as 129 points in early trading before settling at 12,805.39, up 89.46 points. The previous day, it had lost 214 points, the cap to its biggest and longest losing streak this year.

Recommended: Can you manage your money? A personal finance quiz.

European markets rose, too. Stocks climbed roughly 1 percent in major capitals, excluding Greece, after losing 2 to 3 percent the day before. Treasury prices fell, signaling that investors are more willing to put money in stocks.

Other U.S. indexes also erased much of the previous day's losses. The Standard & Poor's 500 rose 10.12 points to 1,368.71 after losing 24 points the day before. The Nasdaq composite climbed 25.24 points to 3,016.46 following a 56-point loss Tuesday.

Alcoa rose more than 6 percent after reporting late Tuesday that it turned a profit in the first three months of the year and handily beat the expectations of Wall Street analysts, who were predicting a loss. Since Alcoa is the first company in the Dow average to report earnings, its results have a greater ability to move the market compared with companies that report later. More first-quarter results will be released over the next few weeks.

Market watchers were divided over how long the gains would last and whether Alcoa's profits actually mean anything for the rest of the earnings season.

"I'm not predicting we're going to have a blowout earnings quarter," said David Armstrong, managing director of Monument Wealth Management in Alexandria, Virginia. "But I think if people thought earnings season was going to be bad, they may be pleasantly surprised."

"One earnings report?" countered Uri Landesman, president of the New York hedge fund Platinum Partners. The boost "will last until the first bad number."

Among stocks making big moves:

Titan Machinery, which sells agricultural and construction equipment, jumped nearly 17 percent after reporting a big increase in quarterly profit.

—Cell phone maker Nokia plummeted nearly 16 percent after warning that heavy competition will hurt first-quarter results.

Share this story:
 
 
Make a Difference
Inspired? Here are some ways to make a difference on this issue.
Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.
 

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...