Dow Rises 90 as Yen Rebounds; Peso Falls Again
U.S. stocks on Wednesday recouped much, but not all, of Tuesday’s losses, as the battered Japanese yen finally showed some strength.
Meanwhile, Asian stock markets were mixed and Europe’s markets rebounded, but Latin American markets slumped again as the Mexico peso hit a record low.
On Wall Street the Dow industrials added 90.11 points, or 1.1%, to 8,552.96, recovering much of Tuesday’s 112-point slide.
Broader market indexes also were higher, as winners topped losers by 22 to 9 on the New York Stock Exchange in heavy trading.
Stocks were bolstered after the yen strengthened from an eight-year-low on Tuesday, rising to 146.44 to the dollar in New York from 147.35.
The yen gained as Japanese officials suggested the government will support the yen if necessary by selling dollars. Haruhiko Kuroda, the director general of the Finance Ministry’s International Bureau, said he was “gravely concerned about the yen’s excessive weakness.”
Today in Tokyo Japanese Vice Finance Minister for International Affairs Eisuke Sakakibara said Japan is seeking an “opportunity” to push up the yen.
But by midday in Tokyo the yen was weakening again, to 146.80.
In any case, on Wednesday bargain hunters entered the U.S. market, lifting stocks from the outset of trading.
The Nasdaq composite index rose 32.83 points, or 1.8%, to 1,825.53 after falling 2.5% on Tuesday. The Russell 2,000 index of smaller stocks, down 2.7% on Tuesday, rose 2% on Wednesday.
With most indexes down between 8% and 19% from their recent peaks, “It’s too early to come out and say the worst is over, because the market is vulnerable to quite a few things that won’t change overnight, like Asia,” said Charles Payne, an analyst at research firm Wall Street Strategies.
Indeed, Latin American stock markets were hammered again on Wednesday, as worries about Russia’s economic crisis kept investors jittery about owning shares in any emerging market.
Mexican stocks slid 1.8% and Brazilian shares dove 4.4%. The Mexican peso fell to a record low of 9.275 to the dollar from 9.2 on Tuesday.
In U.S. bond trading yields edged up as the Treasury sold new 10-year notes at a yield of 5.43%.
Meanwhile, key commodity prices continued to slide to multi-year lows. Corn, soybeans, oil, gold and cattle also fell.
Among Wednesday’s highlights:
* Major bank stocks helped lead the rebound, with J.P. Morgan up $3 to $118.50, Wachovia up $1.81 to $83.44 and First Union up $2.38 to $56.31.
* Brokerage PaineWebber soared $4.25 to $52.63 on talk that it is negotiating to be purchased by Germany’s Dresdner Bank.
* In the tech sector GeoCities soared $8.19 to $45.50 as the Southland-based Web site host’s stock soared for a second day after an initial public offering at $17 Tuesday. Other strong tech stocks included 3Com, up $2.63 to $30, and InfoSeek, up $5.19 to $28.81.
But Adobe Systems slumped $3.44 to $27.38 as the software maker warned of a possible loss in the third quarter and announced plans to cut costs by up to 10%.
* CheckFree Holdings plunged $9.81 at $19.94 after the provider of electronic data-processing services warned of disappointing revenue growth near-term.
* Troubled Cendant rose $2 to $16.13 after saying it will sell publisher Hebdo Mag for a $250 million gain.
* Strong stock sectors included foods, electric utilities, cable TV and retailers.
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Market Roundup, D8
