WORLD> America
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WORLD> America
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Wall Street end back-and-forth session mixed
(Agencies)
Updated: 2008-10-18 11:47 NEW YORK -- Wall Street ended a tumultuous two-week run relatively quietly Friday, finishing another back-and-forth session mixed as investors were cheered by signs of easing in the credit markets and managed to absorb lackluster economic news with equanimity. But while there was less volatility than during recent sessions, analysts warned that the market still faces rough times. The expiration of options contracts helped tug stocks in different directions. Still, the Dow Jones industrial average traded within a narrower range than it had in much of the past two weeks and ended down 127. The market's big rallies on Monday and Thursday gave all the major indexes gains of well over 3 percent for the week -- but that was just a partial recovery from the devastating double-digit drops of the previous week.
"The stock market has finally realized one thing -- that the governments around the world have thrown in a lot of money and they're using all the tools that they possibly can" to restore order to the credit markets, said Peter Cardillo, chief market economist at Avalon Partners Inc., a New York brokerage house. "I'm sure we'll still have a strong bear grip to the market but I do believe the market was way oversold. I do believe we've made a bottom." In recoveries from past market plunges, trading has remained volatile even after the major indexes reached their lows, so it is widely expected that Wall Street will ratchet higher and lower for some time. And, it is not yet clear that the market has actually touched bottom. "I think were going to be groping along for the bottom for the next few weeks," said Phil Orlando, chief equity market strategist at Federated Investors. Cardillo said economic data are likely to remain bleak but that market has already taken into account much of the economy's problems. Some of this week's heavy selling came in response to disappointing economic reports. "Everything is ugly. It's going to stay this way for a while," Cardillo said. The market spent the first half of Friday's session moving between gains and losses after the government said new home construction dropped by more than expected last month to the lowest pace since early 1991. Investors' mood seemed to pick up later in the session as lending rates for bank-to-bank loans edged lower, indicating that some bank fears about not being repaid by borrowers are easing. Demand for safe-haven investments like Treasury bills also decreased. The final hour of trading again proved pivotal as in much of October; stocks fluctuated as investors squared away positions for the week. |
