Stocks Close Higher After Down Sessions
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Wall Street ended a volatile week with a late-day comeback today after investors set aside some concerns about the banking sector and the health of the overall economy.
Stocks began today’s session having fallen in six of the prior seven sessions as investors have fretted about whether consumers would succumb to higher energy prices, rising mortgage costs, and an anemic dollar. Continuing credit turmoil has also stirred concerns about the soundness of corporate balance sheets and profits. A sharp rally Tuesday was largely undone by subsequent pullbacks; today, the market appeared headed to another down day before the major indexes, which had flip-flopped all day, turned higher in the last half-hour.
Financial stocks fell, partly due to a Fortune story that raised the possibility the mortgage lender could be masking the true magnitude of credit-related hits to its profits. Fannie Mae executives, in a conference call with Wall Street analysts, defended a change in the way the largest American buyer and backer of home loans calculates losses on home loans.
Giving investors further reason for worry, FedEx Corp. lowered its earnings expectations for the fiscal second quarter and full year and Starbucks Corp. slashed its earnings forecast for the fourth quarter after it reported traffic at stores open at least 13 months dropped by 1%.
But tech stocks fared better. Investors have at times viewed technology companies as likely to fare better during an economic downturn than some groups such as retailers. Cisco Systems Inc., the world’s largest network equipment company, said today it plans to repurchase an additional $10 billion in stock and an analyst upgraded Hewlett-Packard Co.
Meanwhile, rising oil prices gave a boost to energy names such as Exxon Mobil Corp. and ConocoPhillips.
According to preliminary calculations, the Dow Jones industrial average rose 66.74, or 0.51%, to 13,176.79
Broader stock indicators also recovered. The Standard & Poor’s 500 index rose 7.59, or 0.52%, to 1,458.74. The Nasdaq composite index rose 18.73, or 0.72%, to 2,637.24.
