Bulls Fight Back in Tumultuous Session
FOX Business: The Power to Prosper
Markets fought off fears that soaring crude prices would derail the economic recovery, closing the day with modest gains.
Today's Markets
The Dow Jones Industrial Average gained 8.78 points, or 0.07%, to 12,066, the S&P 500 was up 2.11 points, or 0.16%, to 1,308 and Nasdaq Composite Index tracked higher by 10.66 points, or 0.39%, to 2,748. The FOX 50 inched higher by 0.95 points, or 0.10%, to 928.
Markets seesawed between positive and negative territory throughout the session as traders mulled the impact soaring energy prices would have on the global economic recovery.
Oil prices settled above the $100 threshold for the first time since September 2008, jumping $2.60, or 2.61%, to $102.23 a barrel. Crude prices have been spiking amid increased instability in numerous oil-producing countries, namely Libya and Iran.
Indeed, the situation in Libya continued escalating, with forces loyal to leader Muammar al-Qaddafi clashing with opposition forces for control of ports where oil is shipped and refined, according to several reports.
Oil inventories unexpectedly dropped 400,000 barrels last week, far shy of estimates of a build of 1 million barrels. Reduced supplies of oil is generally seen as a bullish indicator for crude.
On the economic front, the number of layoffs U.S. firms planned in February jumped 32% from January to the highest level in 11 months. Companies planned on slashing 50,702 jobs in February, a report by Challenger, Gray & Christmas said.
The private sector added 217,00 jobs in February, far exceeding economists' estimates for a gain of 175,00 jobs, according to a report by payroll company ADP.
Both of these reports are leading up the unemployment figures from the Labor Department, due to hit markets Friday morning. The national unemployment rate was at 9.0% in January, far higher than the so-called natural level that is expected in a healthy economy.
Despite better-than-expected data on private-sector jobs, some market participants were still cautious on markets' ability to rebound.
Tuesday's "selloff was so broad, and did so much damage ... that it’s going to take more than a positive ADP report to turn markets around," said Peter Kenny, managing director at Knight Capital Group."We’re going to continue seeing some pressure on the market."
The economy continued growing at a moderate pace in January and early February, with only slight increases in prices, according to the Atlanta Federal Reserve's beige book. Some economists fear the Fed's heavily expansionary monetary policies --including keeping short-term interest rates near 0% -- can push prices dramatically higher, creating long-term inflation.
Federal Reserve Chairman Ben Bernanke said Tuesday that despite modest gains in economic growth, the jobs market remains too weak to support a full recovery.
Applications for new mortgages dropped 6.5% last week, according to a report by the Mortgage Bankers Association.
Gold settled at a record high, and was up for a third consecutive day, jumping $6.50, or 0.45%, to $1,437 a troy ounce. Assets often shift to gold during volatile times in equity markets because the precious metal is seen as a safe-haven by some traders.
In currencies, the euro gained 0.65% against the U.S. dollar and the greenback tumbled 0.13% on the Japanese yen.
Corporate Movers
Apple (NASDAQ:AAPL) unveiled the second version of its popular iPad. The new device is going to feature a new, dual-core processor that enables the device to perform twice as fast, and have nine times the graphics performance. It will also have rear and front cameras built in. The technology-giant sold 15 million iPads in 2010.
Staples (NASDAQ:SPLS) said its earnings increased 38 cents per share, or 18%, less than the 40 cents analysts were expecting.
American International Group (NYSE:AIG) is looking to unload its entire stake in MetLife (NYSE:MET) in a public offering, according to a report by The Wall Street Journal.
Costco (NASDAQ:COST) reported fiscal second-quarter profits were up 79 cents per share, or 16%, as cash-strapped consumers seek out low prices.
Yahoo (NASDAQ:YHOO) is negotiating a sale of its 30% stake in its Japanese site -- the most-visited Web portal in Japan, according to a report by The Wall Street Journal.
Texas Instruments (NASAQ:TXN) and Xilinx (NASDAQ:XLNX) were top-performing issues on the S&P 500 after JPMorgan raised its ratings on the chip-makers from "neutral" to "overweight."
Foreign Markets
European markets were lower, but came back from steeper losses earlier in the session. The English FTSE 100 slid 0.35% to 5,914, the French CAC 40 dropped 0.81% to 4,034 and the German DAX fell 0.58% to 7,181.
In Asia, the Japanese Nikkei plunged 2.43% to 10,492 and the Chinese Hang Seng skid 1.49% to 23,048.