Stocks end mixed after Chrysler bankruptcy news
Stock prices mostly held steady Thursday despite a bankruptcy filing by a major carmaker, allowing the Standard & Poor’s 500 index to post its biggest monthly gain in nine years.
The S&P; 500 index, considered the most reliable measure of the broader market, soared 9.4% in April, its best performance since March 2000, the peak of the dot-com bubble.
The S&P;’s 19% gain since the end of February is its best two-month rise since 1975.
The Dow Jones industrial average shot up 7.4% last month after a 7.7% gain in March.
Stocks rallied early Thursday, with the Dow climbing more than 120 points, then fell back after President Obama confirmed that Chrysler would be entering Chapter 11.
The Dow closed down 17.61 points, or 0.2%, to 8,168.12, while the S&P; fell 0.83 of a point, or 0.1%, to 872.81.
The Nasdaq composite index rose 5.36 points, or 0.3%, to 1,717.30.
Even with their gains in March and April, the Dow and S&P; 500 index remain down 42% and 44%, respectively, from their peaks in October 2007.
The Dow’s and S&P;’s sharp advances since hitting 12-year lows March 9 bolster the belief held by many economists that the country’s deep recession is months away from ending.
In downturns over the last 60 years, the S&P; hit bottom about four months on average before a recession ended and about nine months before unemployment peaked.
“The market is saying that the economy would hit its trough this summer,” said Al Goldman, chief market strategist at Wachovia Securities in St. Louis.
Many investors and policymakers hope and expect that Wall Street itself will help the broad economy along.
The same psychology that led many people to cut their spending after last fall’s frightening stock plunge could work in reverse, boosting confidence in the economy and making Americans feel more comfortable about spending.
In other market highlights Thursday:
* McDonald’s, Kroger and Office Depot each slid more than 2% after the government reported that March saw consumer spending fall 0.2% and personal income slip 0.3%, reflecting wage cuts and layoffs. Both economic readings were weaker than economists expected. But another report Thursday showed initial claims for unemployment benefits falling unexpectedly last week.
* Kellogg jumped 6.6% after the cereal maker reported a profit that rose more than Wall Street expected, lifted by cost cutting.
* Eastman Kodak lost 16%. The photography pioneer said its quarterly loss tripled as the recession cut demand.
* Exxon Mobil sank 3.6% after posting its lowest quarterly profit in five years in the wake of the plunge in oil prices since last summer.
* MGM Mirage soared 36% after the casino operator hammered out a deal with lenders to finish an $8.5-billion Las Vegas Strip development.
* Dow Chemical shot up 18%. The company’s first-quarter profit plunged 97% as sales tumbled, but the results were better than expected.
