US stocks made another dramatic comeback after a stunning fall on Thursday, in another day of extreme volatility in markets around the world.
The Dow Jones Industrial Average battled back from Wednesday’s 520-point loss with a 3.94 per cent gain, adding 423.37 points to close at 11,143.31.
The broader S&P 500 rebounded 4.63 per cent, up 51.88 points to 1,172.64, while the Nasdaq gained 111.63 points, or 4.69 per cent, to 2,492.68.
It was the US markets’ second recovery this week, after Tuesday’s jump to overcome a big loss on Monday.
“This isn’t a volatile equity market. It is an extremely volatile equity market,” said Patrick O’Hare of Briefing.com. “The massive swings are symptomatic of a market that is racked with uncertainty and where every rumour is treated as truth until the real truth can set one free from the rumour. The cycle soon begins anew, though, when the next rumour hits the wires.”
The markets opened higher and picked up the pace after Europe’s bourses closed solidly in the green zone.
Earlier in the day they had swung violently between losses and gains on rumours about France’s fiscal strength and potential debt defaults by Italy and Spain.
After French President Nicolas Sarkozy called a meeting with German Chancellor Angela Merkel aimed at preventing the eurozone debt crisis from forcing Italy and Spain into default, the markets rebounded, the DAX closing up 3.28 per cent, the CAC 40 up 2.89 per cent, and the FTSE gaining 3.22 per cent.
“Positive corporate results overshadowed debt concerns in Europe,” added Scott Marcouiller of Wells Fargo Advisers.
The 30 Dow blue-chips were all higher, led by a 16 per cent jump from Cisco Systems, which reported higher-than-expected earnings per share for the fiscal fourth quarter after the market closed Wednesday and garnered several new analyst upgrades on promises for a stronger coming year.
News Corp rose 16.75 per cent following its solid after-close earnings report and bullish forecast Wednesday.
Banks also recovered some of the previous day’s 10 per cent-plus losses. Bank of America added 7.1 per cent while Citigroup gained 6.3 per cent.
Bond yields firmed after trading at near-record lows a day earlier.
The 10-year Treasury bond rose to 2.33 per cent from 2.09 per cent late Wednesday, while the 30-year rose to 3.78 per cent from 3.49 per cent. Bond prices and yields move in opposite directions.
AFP
