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Wall St. Ends Up Over 6 Pct., Dow Up 553

Thursday, 13 November 2008 04:05 PM

NEW YORK -- U.S. stocks surged Thursday after hitting 5-1/2-year lows in a roller-coaster session as investors shrugged off dismal economic news to snap up beaten down shares and oil prices rose sharply after falling below $55 a barrel.

The three major U.S. indexes soared more than 6 percent, led by oil and energy shares, and crude oil shot up 3.7 percent as investors rushed to buy assets on hopes prices had finally touched bottom.

"I'm sensing we might be nearing the bottom," said Mark Waggoner, president of Excel Futures in Huntington Beach, California, referring to crude prices.

Crude oil has plummeted more than $90 a barrel since peaking at around $147 in July. It settled up $2.08 at $58.24 on Thursday, as OPEC seemed poised to cut production again later this month and the rebound in equities offset growing signs of slowing demand.

The stock rally halted a flight to safety bid in both bonds and the dollar. In late afternoon trade the euro was up 3 percent against the dollar at $1.2836, clawing back from the two-week low of $1.2389 hit earlier in the day.

"The dollar has benefited lately from a flight-to-safety bid generated in part by high volatility in the U.S. equity markets. The move today was reversed," said Gareth Sylvester, senior currency strategist at HiFX in San Francisco.

Stocks rallied off a midday plunge that sent the S&P 500 breaking below an intraday low for the year set on Oct. 10. The Dow broke through the 8,000 mark, but still remained more than 80 points above an intraday low also set on Oct. 10.

The Dow Jones industrial average closed up 552.59 points, or 6.67 percent, at 8,835.25. The Standard & Poor's 500 Index gained 58.99 points, or 6.92 percent, at 911.29. The Nasdaq Composite Index surged 97.49 points, or 6.50 percent, at 1,596.70.

Chevron added the most points to the Dow's rise, climbing 12.5 percent at $75.71, and Exxon Mobil was the second-biggest contributor, gaining 9.4 percent at $75.41.

Crude oil prices rose after earlier dropping to $54.67, the weakest price since January 2007, following the release of U.S. government data showing the inventory of products was rising and demand was weakening.

The S&P energy index climbed 11.1 percent, while the S&P financial index jumped 7.2 percent

Stocks slid earlier in the session after another round of gloomy economic data and a lowered revenue outlook from Intel Corp ,the world's largest maker of computer chips.

The Organization for Economic Cooperation and Development cut its economic output forecasts for the United States, Japan and the euro zone, saying it sees all three falling into recession.

Earlier in Europe, stocks declined for a fifth day in seven sessions, posting their lowest close in two weeks.

The FTSEurofirst 300 index of top European shares closed a volatile session 0.4 percent lower at 852.55 points.

Shares in British lenders were among the hardest hit, amid mounting worries that the UK economy faces tough times ahead. Barclays lost 6.3 percent and Royal Bank of Scotland 6.1 percent.

"In the short term the news flow will remain negative, with more jobs destruction, falling consumer spending, etc. etc.," said Yann Lepape, an economist at Oddo Securities in Paris. "And the gloom is on both the macro and the micro fronts, with profit warnings on the rise."

Short-dated euro zone government bond yields fell to their lowest level in over three years on news Germany has fallen into recession, increasing expectations for further interest rate cuts from the European Central Bank.

The recession in Germany, Europe's biggest economy and the world's top exporter of goods, bodes ill for euro-zone figures on gross domestic product due on Friday.

"The ECB is hinting strongly that rates are going to come down again next month. The news still remains unambiguously negative," said Investec economist David Page.

In the United States, the government reported the number of U.S. workers drawing jobless benefits hit a 25-year high this month and U.S. imports suffered a record drop in September, underscoring a rapid drop-off in the U.S. economy.

U.S. gold futures ended nearly 2 percent lower in choppy trade.

The December contract for gold settled down $13.30 at $705.00 an ounce in New York.

The benchmark 10-year U.S. Treasury note fell 37/32 in price to yield 3.88 percent, while the 2-year U.S. Treasury note fell 5/32 in price to yield 1.25 percent.

The dollar fell against a basket of major currencies, with the U.S. Dollar Index off 1.73 percent at 86.229. Against the yen, the dollar rose 2.79 percent at 97.51.

Japan's Nikkei average dropped 5.3 percent overnight, and Asian shares fell to their lowest this month, with the MSCI index of the region's stocks outside Japan falling 4.8 percent.

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NEW YORK -- U.S. stocks surged Thursday after hitting 5-1/2-year lows in a roller-coaster session as investors shrugged off dismal economic news to snap up beaten down shares and oil prices rose sharply after falling below $55 a barrel.The three major U.S. indexes soared...
Thursday, 13 November 2008 04:05 PM
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