Stocks higher after Thursday sell-off
Stocks bounced higher in the first trading since Moody’s Investors Service slashed credit ratings of 15 major banks navigating Europe’s economic turmoil.
A day after it dove 251 points on Thursday, the Dow Jones industrial average gained 58 points, or 0.5%, to 12,631 shortly after the opening bell on Wall Street.
The broader Standard & Poor’s 500 index was up 6 points, or 0.4%, to 1,331. The Nasdaq was up 9 points, or 0.3%, to 2,868.
Investors had been expecting the downgrades for months. Morgan Stanley was docked two credit notches, less than anticipated, making it a “clear winner,” analysts for Keefe, Bruyette & Woods wrote in a note.
Morgan Stanley’s stock gained 16 cents, or 1.2%, to $14.12 a share in early trading.
The KBW analysts said the expectation of Moody’s downgrades, along with the European financial crisis, had unsettled markets.
“Although a downgrade is not a positive, we are encouraged that the downgrades were in line or better than expectations and it appears that a headwind has been removed,” the note said.
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