World Business

US stocks recover from early plunge, Dow takes back 10,000

(Xinhua)
Updated: 2010-05-26 15:17

 

A trader works on the floor of the New York Stock Exchange in New York, May 25, 2010. Financial stocks led Wall Street to recover from an early plunge on Tuesday, lifting the Dow back above the 10,000 benchmark. [Xinhua/Shen Hong]

NEW YORK - Wall Street recovered from an early plunge and ended narrowly mixed on Tuesday, with the Dow recovering the 10,000 level, as buyers came back to the market after stocks touched new 2010 lows.

The Dow Jones industrial average fell 22.82, or 0.23 percent, to end at 10,043.75, after plummeting nearly 300 points at the opening.

The Standard & Poor's 500 index inched up 0.38, or 0.04 percent, to 1,074.03, erasing earlier sharp losses which brought the index to the lowest level in the year of 2010. The technology-heavy Nasdaq also recovered from a sharp decline and ended only 2.60 points, or 0.12 percent, lower to finish at 2,210.95.

Major averages suffered great losses in early trading. The Dow plunged below 10,000 and all three major indexes traded about 2.5 percent lower as concerns of economic slowdown and tensions on the Korean Peninsula spurred panic selling.

Related readings:  US stock market falls to 1997 levels

Most of the overseas markets also fell sharply on ongoing concerns about the health of Spain's banking sector after the debt- troubled country announced its move to rescue a saving bank.

The euro continued to fall against the dollar in the morning session, approaching the four-year record low of 1.2146 dollars it set last month.

Meanwhile, growing tensions on the Korean Peninsula also unsettled global investors after the Democratic People's Republic of Korea (DPRK) warned that warships of the Republic of Korea (ROK) trespassed on DPRK territorial water in the past two weeks, which could lead to military conflict.

Also adding to the fears, a report on U.S. home price came in worse than expected. The Standard & Poor's/Case-Shiller 20-city home price index fell 0.5 percent in March from February, a sign that the housing market remains weak even as mortgage rates are near historical lows.

Separately, the Conference Board said its consumer confidence index climbed for the third straight month to 63.3 in May, stronger than expected but providing little boost to the market.

However, the market soared in the final hour of trading as financials picked up after signals from Washington suggested banks would not be forced to sell their lucrative derivatives units as part of a proposed financial reform.