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New York - Stocks Power Higher After A Dreadful Week; Dow Jumps 410

Published on: February 12, 2018 04:51 PM
By: AP
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A trader works on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., February 9, 2018. REUTERS/Andrew Kelly A trader works on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., February 9, 2018. REUTERS/Andrew Kelly

New York - Stocks powered higher Monday, sending the Dow Jones industrial average up 410 points, as the market clawed back more of its massive losses from the previous two weeks.

Apple jumped 4 percent and led a rally in technology companies, while industrial companies, banks, and consumer-focused companies like retailers also rose.

Netflix and Amazon surged again as stocks that led the market higher in 2017 recovered more of the ground they lost recently. Energy companies got some relief as oil prices turned higher. All of that helped stocks build on the market’s gains from late Friday.

Some market watchers say the recent bout of turbulence may not be over. Jim Paulsen, chief investment strategist for the Leuthold Group, said he thinks stocks and bonds will fall further as investors consider the likelihood that interest rates will keep rising and inflation will increase. Inflation and higher wages can cut into company profits, and higher interest rates slow down economic growth.

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“The catalyst behind this bull market up until maybe the last year or so has just been the ability of this economy to grow, even if it’s very sluggishly (...) without creating any negative consequences for the financial markets,” he said.

Paulsen said the consumer prices report Wednesday or the February employment report due next month could both have major effects on the market.

The Standard & Poor’s 500, the benchmark for many index funds, gained 36.45 points, or 1.4 percent, to 2,656. The Dow climbed 410.37 points, or 1.7 percent, to 24,601.27. It had risen as much as 574 earlier, led by big gains for Boeing and Apple.

The Nasdaq composite advanced 107.47 points, or 1.6 percent, to 6,981.96. The Russell 2000 index of smaller-company stocks rose 13.15 points, or 0.9 percent, to 1,490.98.

It took just nine days for stocks to plunge 10 percent from their latest peak, which was reached on January 26. A drop of that size is known on Wall Street as a market “correction.” According to LPL Financial, it was the swiftest move from a record high to a correction in the history of the S&P 500. The index rose 1.5 percent Friday but still wound up with its worst weekly loss in more than two years.

Despite the two-day recovery, the S&P 500 is down 7.5 percent from its record high, and investors expect far more volatility in the stock market than they did two weeks ago.

That comes after a remarkably calm year for stocks: there were only eight days in 2017 where the S&P 500 rose or fell at least 1 percent. But it’s happened six times in the last seven trading days, and eight times since the market’s peak Jan. 26. That includes several drops that were far larger than anything the market endured last year.

Other gainers in the technology industry included Cisco Systems, which rose $1.07, or 2.7 percent, to $40.60. Chipmakers Broadcom and Qualcomm each climbed after CNBC reported that the companies will meet this week to discuss Broadcom’s $121 billion offer to buy Qualcomm.

Retailers, apparel makers and other companies that focus on consumers made some of the largest gains, a sign that investors expect shoppers to keep spending and the economy to keep growing.

Benchmark U.S. crude gained 9 cents to $59.29 a barrel in New York. Brent crude, used to price international oils, lost 20 cents to $62.59 a barrel in London.

Oil prices have dropped since reaching long-time highs in late January, when U.S. crude peaked at $66 a barrel. The S&P 500 energy index is down 12.7 percent over the last month.

Defense contractor General Dynamics will spend almost $7 billion to buy internet technology company CSRA. The Trump administration has been pushing defense spending aggressively higher. CSRA climbed $9.57, or 31.1 percent, to $40.39 Monday. General Dynamics lost $2.57, or 1.2 percent, to $209.53.

Twenty-First Century Fox picked up 66 cents, or 1.9 percent, to $36.40 after The Wall Street Journal reported that cable and internet provider Comcast is still interested in buying Fox’s entertainment divisions and could make another offer. Disney agreed to buy Fox’s movie and television studios and some cable and international TV businesses in December for $52.4 billion.

Comcast fell 3 cents to $38.54 while Disney added 30 cents to $103.39.

Bond prices were little changed. The yield on the 10-year Treasury note stayed at 2.86 percent.

In other energy trading, wholesale gasoline fell 2 cents to $1.68 a gallon. Heating oil fell 2 cents to $1.84 a gallon. Natural gas slid 3 cents to $2.55 per 1,000 cubic feet.

The dollar rose to 108.67 yen from 108.53 yen. The euro rose to $1.2284 from $1.2231.

Gold rose $10.70 to $1,326.40 an ounce. Silver jumped 43 cents, or 2.7 percent, to $16.57 an ounce. Copper added 5 cents, or 1.7 percent, to $3.09 a pound.

Germany’s DAX jumped 1.4 percent while the CAC 40 in France and the British FTSE 100 both advanced 1.2 percent.

Hong Kong’s Hang Seng lost 0.2 percent and Seoul’s Kospi rose 0.9 percent. Markets in Japan were closed for a holiday.



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Read Comments (10)  —  Post Yours »

1

 Feb 12, 2018 at 05:32 PM Educated Archy Says:

Yes this was a correction.

And thanks to trump the economy is doing great. Specifically inflation is up as wages are up thanks to tax cuts and deregulation. Contrary to popular belief when the economy is doing really well stocks can decline a bit. Below is the rational,

"stocks and bonds will fall further as investors consider the likelihood that interest rates will keep rising and inflation will increase. Inflation and higher wages can cut into company profits"

Thank you president Trump for bringing us to this point.

2

 Feb 12, 2018 at 05:58 PM AmYisroel Says:

Obamanation - Dow up 21.95% from inauguration to close feb 12 2010
Trump - Dow up 24.67% from inauguration to close feb 12 2018

3

 Feb 12, 2018 at 06:18 PM Educated Archy Says:

Reply to #2  
AmYisroel Says:

Obamanation - Dow up 21.95% from inauguration to close feb 12 2010
Trump - Dow up 24.67% from inauguration to close feb 12 2018

Those are number games. Its hard to win based on just that.

The real argument is two fold.
1) What policy did Obama enact that increased shareholder value? To be fair Bernankie a Bush appointee and hold over did QE which increased the money supply (and of course he cut rates). That made it easier for banks to borrow and increased value. But that was an old standing Fed reserve policy and had nothing to do with Obama. Trump on the other hand increased value by cutting regulations that cost corporations money and cutting tax liabilities.

2) To go up from bear market that's at its low is no vice. Barring a depression of which there are safeguards in place, the economy has an intrinsic value. So stocks can really only be bullish under obama. However when stocks are at record highs and in fact fluctuating around its highs for a while with low volatility what pushes it higher? You need to add value which is what trump did.

4

 Feb 12, 2018 at 06:24 PM Anonymous Says:

May Hashem bless the stock market!

5

 Feb 12, 2018 at 06:29 PM Anonymous Says:

Reply to #2  
AmYisroel Says:

Obamanation - Dow up 21.95% from inauguration to close feb 12 2010
Trump - Dow up 24.67% from inauguration to close feb 12 2018

Great. Trump is 2 points ahead. He is wining today. Thursday he was loosing.
How about lets start comparing their his avg approval rating, You pick Gallup? Rasmussen whatever.
Obama 47% Trump 37%

6

 Feb 12, 2018 at 06:40 PM Anonymous Says:

Reply to #2  
AmYisroel Says:

Obamanation - Dow up 21.95% from inauguration to close feb 12 2010
Trump - Dow up 24.67% from inauguration to close feb 12 2018

Let me explain it one more time. When you inherit a Great economy like Trump did its much easier to continue. Just continue the good policies. When you inherit a Recession like Obama did its very difficult. Its so simple. If you inherit a Great Business it not so hard to continue to make a Ton. Just follow what your Dad (or Mom) did. If you inherit a Bankrupt bussines its very hard to make money. Trump is a good example. He got from his dad 200.000.000 and made it even more. I know many many yingeleit who's father was in Kolel and they are in Kolel. Go tell it to an EDUCATED person that its easier for a Kolelyungerman to become a millioner that to a son of a rich person.

7

 Feb 12, 2018 at 07:46 PM LOL Says:

Reply to #6  
Anonymous Says:

Let me explain it one more time. When you inherit a Great economy like Trump did its much easier to continue. Just continue the good policies. When you inherit a Recession like Obama did its very difficult. Its so simple. If you inherit a Great Business it not so hard to continue to make a Ton. Just follow what your Dad (or Mom) did. If you inherit a Bankrupt bussines its very hard to make money. Trump is a good example. He got from his dad 200.000.000 and made it even more. I know many many yingeleit who's father was in Kolel and they are in Kolel. Go tell it to an EDUCATED person that its easier for a Kolelyungerman to become a millioner that to a son of a rich person.

Let me explain this to you once again. It's very easy for the market to rise under Obama. He inherited an economy that was coming out of a recession thanks to the Bush tax cuts. The market only had one way to go and that was up. To do what Trump is doing is almost unheard of. 9 months into the bull market he has the economy roaring like it hasn't been in decades. To me his achievements outweigh what Obama did by a huge margin.

8

 Feb 12, 2018 at 08:28 PM Educated Archy Says:

Reply to #6  
Anonymous Says:

Let me explain it one more time. When you inherit a Great economy like Trump did its much easier to continue. Just continue the good policies. When you inherit a Recession like Obama did its very difficult. Its so simple. If you inherit a Great Business it not so hard to continue to make a Ton. Just follow what your Dad (or Mom) did. If you inherit a Bankrupt bussines its very hard to make money. Trump is a good example. He got from his dad 200.000.000 and made it even more. I know many many yingeleit who's father was in Kolel and they are in Kolel. Go tell it to an EDUCATED person that its easier for a Kolelyungerman to become a millioner that to a son of a rich person.

Bad example and horrible analogy .

Yes if u inherit a successful grocery store all I have to do is continue that same business . But a capitislist economy always has a boom and bust cycle ( unlike the grocery store ) There is always an up and down period . Barring a complete depression of which there are safeguards an economy won't hit zero at a bust or bear moment unless we are venezualla . So on a macro level it's easier for markets to go up when you come into office at abthe rick bottom . It's estentially the only direction for it to go . But when it's at the top it's only direction is down , yet it continues to rise that's only because of added value .

But instead of us going in circles why don't you outline what it is that obama did to improve markets . Please outline an obama policy that resulted in added shareholder value . Name one policy or proposal please

9

 Feb 12, 2018 at 09:30 PM AmYisroel Says:

Reply to #5  
Anonymous Says:

Great. Trump is 2 points ahead. He is wining today. Thursday he was loosing.
How about lets start comparing their his avg approval rating, You pick Gallup? Rasmussen whatever.
Obama 47% Trump 37%

Actually for February 8
In 2010 for The Obamanation it was up 19.65%
In 2018 for Trump it was up 20.92%

10

 Feb 13, 2018 at 07:48 AM Boroch Says:

To #6- I want to get rid of your idiotic urban myth once and for all. When Fred Trump died in 1999, his estate was no more than $20 million dollars, which was divided up between Trump and his two sisters, and his surviving brother. When Fred Trump was alive, he lent Donald 1 million dollars to assist with his new business. THIS IDIOTIC URBAN MYTH THAT TRUMP RECEIVED 200 MILLION DOLLARS FROM HIS FATHER IS A LIE AND A MYTH!!

11

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