WORLD> America
|
WORLD> America
|
|
Stocks trade mixed as profit-taking sets in
(Agencies)
Updated: 2008-10-14 23:42 NEW YORK - Wall Street fluctuated Tuesday as investors reacted enthusiastically to the US government's plans to spend $250 billion to buy stock in private banks but also collected profits from the previous day's massive advance. The Dow Jones industrial average was modestly lower a day after its record 936-point jump.
Profit-taking started creeping into the market after the Dow surged more than 400 points at the opening, and it was expected that some investors would take some money out of the market after such a massive gain. Moreover, it was widely anticipated that Wall Street would continue to see volatility in the weeks and perhaps months ahead because of worries about the economy. Investors had snapped up stocks Monday in anticipation of the government's plan. President Bush said Tuesday the government will use a portion of the $700 billion bailout to inject capital into the nation's major banks, which have been slammed by souring mortgage investments. The move follows a similar one announced Monday by European governments to invest about $2 trillion in their own troubled banks. Investors are hoping extraordinary steps by government officials will help resuscitate stagnant credit markets. The revised bailout plan differs from the original in that it aims to recapitalize banks, not just buy the troubled assets off their books at prices that could leave the banks with losses. "This begins to penetrate the core of the problem," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. But, he said, "there will be a point in time where the euphoria of the bailout plan begins to wear off and the market begins to face reality. And that reality is likely to be a sour earnings season, and that the economy is in recession." In late morning trading, the Dow rose 23.74, or 0.25 percent, to 9,411.35. Broader stock indicators were mixed. The Standard & Poor's 500 index rose 1.77, or 0.18 percent, to 1,005.12 and the Nasdaq composite index fell 33.53, or 1.82 percent, to 1,810.72. Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 632.2 million shares. |
