Posted at 11:27 a.m., Monday, September 9, 2002
Bargain hunters send stocks higher
By Hope Yen
The Dow Jones industrial average rose 92.18, or 1.1 percent, to 8,519.38, according to preliminary calculations. It fell 2.7 percent last week.
Broader indicators were also higher. The Nasdaq composite index rose 9.31, or 0.72 percent, to 1,304.61 after last week's 1.5 percent decline. The Standard & Poor's 500 index was up 9.04, or 1.01 percent, at 902.96 following last week's loss of 2.4 percent.
The Dow fell as much as 110 points this morning before recovering the lost ground and turning higher. But trading volume was light, and experts said the rise was not an overall indication of renewed stock market strength.
"I think don't think anything that happens until post 9/11 is meaningful," said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray. "Nobody knows what to do."
Some analysts attributed today's comeback to bargain hunting after volatile trading last week, when the Dow alternated triple-digit winning sessions with triple-digit losing days.
"I think people felt the market may have been selling off too much in advance of the (Sept. 11) anniversary," said Barry Berman, head trader for Robert W. Baird & Co.
But investors remain wary about Wednesday's one-year anniversary of the terror attacks as well as a possible war with Iraq, analysts said. The New York Stock Exchange and Nasdaq Stock Market both plan to delay their opening Wednesday until 11 a.m. in observance of the anniversary.
"People are jittery in front of the anniversary, worrying something may be brewing," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "Then there's the saber-rattling over Iraq. That keeps buyers away from the market."
Alfred E. Goldman, chief market strategist for A.G. Edwards & Sons Inc., said "investors are just in a very depressed state of mind, and that's not being not helped by the one-year anniversary coming up."
He also attributed some of the market volatility to "the possibility or probability of war with Iraq" and worries that corporate earnings "are going to be somewhat disappointing."
As a result, he predicted, "we could see a full test of the July 23 lows." That day, the Dow closed at 7,702.30.
Among financial services companies, J.P. Morgan Chase fell 32 cents to $23.59 after Merrill Lynch cut the company's earnings estimates for 2002 and 2003.
But Citigroup, a competitor, rose 79 cents to $31.07 the day after it removed Michael Carpenter as head of its global corporate and investment bank and named chief operating officer Charles Prince as his replacement.
The unit controls the Salomon Smith Barney brokerage, which has been at the center of state and federal investigations into favoritism in initial public offerings and the independence of its analysts.
The market also responded to corporate guidance on third-quarter earnings. Shares in Snap-On, the toolmaker, dropped $3.50, or more than 12 percent, to $24.45 after the company lowered its earnings outlook because of weaker-than-expected sales.
Advancing shares outpaced declining shares by about 3 to 1 on the New York Stock Exchange, where volume was extremely light at 1.12 billion shares, compared to 1.45 billion Friday.
The Russell 2000 index, the barometer which tracks smaller company stocks, rose 0.90, or 0.2 percent, to 392.47.
Overseas, Japan's Nikkei stock average finished 1.9 percent higher. Markets in Europe fell: Germany's DAX index was off 1.6 percent, France's CAC-40 dropped 1.4 percent, and Britain's FTSE 100 declined 1.1 percent.