FOX Business: The Power to Prosper
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The blue chips tacked on slight gains after a tumultuous session on Wednesday, putting an end to the longest losing streak since the financial crisis three years ago.
According to preliminary calculations, the Dow Jones Industrial Average rose 30 points, or 0.25%, to 11,896, the S&P 500 rose 6.3 points, or 0.5%, to 1,260 and the Nasdaq Composite gained 23.8 points, or 0.89%, to 2,693. The FOX 50 tacked on 4.2 points, or 0.47%, to 901.
While the turnaround on Wednesday was fairly shallow, it snapped eight days of losses where the blue chips shed 858 points. In what some traders point to a sign of conviction, volume was heavy on the day.
Wall Street had deep in the red earlier in the session, with the Nasdaq down nearly 2% and the Dow off 150 points, but managed to turn modestly positive.
The early selling was triggered as fears of a double-dip recession were bolstered by some new reports released, including one showing the services sector expanded at a slower pace than expected pace in July. However, traders took advantage of buying opportunities late in the trading day, helping to lift the markets.
Wall Street has, however, been unable to rally around the lifting of the U.S. debt ceiling in time to avert a catastrophic default as the focus has once again shifted to the economy. Recent data showing the manufacturing sector has nearly stalled, weakness in the consumer sector and a downward revision to economic growth has sparked concerns among economists, worrying market participants.
A report from the Institute for Supply Management saying non-manufacturing PMI fell to 52.7 in July from 53.3 the prior month, short of expectations of 53.6, spooked the markets early on. Readings above 50 point to expansion, while those below 50 point to contraction.
Likewise, the Commerce Department said factory orders fell 0.8% in June, a bigger decline than the 0.7% Wall Street estimated.
The number of planned layoffs at U.S. companies jumped 60% to 66,414 in July from June -- the highest level in 16 months, a report from Challenger, Gray & Christmas showed. The number was also 59% higher than the same period last year.
Economic fears have weighed heavily on the markets, with the blue chips shedding 858 points during the eight-day losing streak that came to an end on Wednesday.
I think we are pricing in a very slow growth environment and thats having an effect on equities, said Nick Kalivas, vice president of financial research at MF Global. Youre seeing a material rethinking of what the profit outlook is. Liquidation is pretty strong.
Energy markets plunged into the red on a bearish weekly inventory report. Crude oil inventories climbed 950,000 barrels, compared with estimates for a 900,000 barrel build. Meanwhile, gasoline stocks jumped 1.7 million barrels compared with a forecast for a 100,000 barrel increase.
Light, sweet crude fell $1.86, or 2%, to $91.93 a barrel. Wholesale RBOB gasoline dipped 11 cents, or 3.5%, to $2.93 a gallon.
All of this is occurring as Wall Street braces for the monthly employment report from the Labor Department that is slated for release on Friday. The economy is expected to have added just 57,000 jobs, preventing the unemployment rate from falling from 9.2% in July. The labor market essentially stalled in June, when the economy added just 18,000 jobs.
The private sector tacked on 114,000 jobs in July, according to payroll firm ADP, better than the 100,000 economists forecast. The report is not always a reliable gauge of the more closely-followed jobs report from the Labor Department, and did little to allay worries over the labor market.
"Expectations for Fridays report are not likely to be bolstered nor weakened following todays report," Daniel Greenhaus, chief global strategist at BTIG, wrote in a note. "Job growth in July was frustratingly slow yet again and nothing in todays report suggests that estimates for Friday deserve any meaningful reconsideration."
Some market participants believe the recent plunge on Wall Street may have gone too far.
With so much negative sentiment, that tends to be a bullish signal. If Im already in the market, I would certainly buy some stock here, said Jason Weisberg, vice president at Seaport Securities. A lot of the naysayers in the market think its the end of the world, but they missed the bottom and the 3,000 point move. They were wrong for the past 2 � years.
Prices at the pump remain stable, yet also elevated, for another day. A gallon of regular costs $3.70 on average nationwide, up from $3.57 last month and $2.72 last year, according to the AAA Fuel Gauge report.
In metals, gold notched a record high for the second-straight session in a row amid high volatility on Wall Street. The precious metal recently jumped $21.80, or 1.3%, to $1,666 a troy ounce.
The euro recently jumped 0.92% against the dollar, while the greenback fell 0.67% against a basket of world currencies
MasterCard (NYSE:MA) posted quarterly earnings of $4.76 a share, easily topping estimates of $4.23 and sending its stock soaring more than 8% to 52-week highs.
The English FTSE 100 fell 2.3% to 5,584, the French CAC 40 dipped 1.9% to 3,455 and the German DAX slid 2.3% to 6,641.
In Asia, the Japanese Nikkei 225 plunged 2.1% to 9,637 and the Chinese Hang Seng slid 1.9% to 21,993.