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Stock market rebounds from worst day of the year


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Originally Posted Online: April 16, 2013, 10:46 am
Last Updated: April 16, 2013, 11:51 am
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NEW YORK (AP) — Good news on housing and earnings helped stocks rebound from their worst day of the year.

The Dow Jones industrial average rose 129 points, or 0.9 percent, to 14,728 as of noon EDT, winning back about half of the 265 points it lost a day earlier.

Home construction topped 1 million last month, the highest level since June 2008. Strong earnings from companies including Coca-Cola also propelled the market higher.

Optimism about housing and a pickup in hiring were major catalysts driving the stock market's surge early this year. The Dow and the Standard & Poor's 500 jumped 11.3 percent and 10.3 percent, respectively, in the first three months of 2013.

That run-up was interrupted Monday when stocks had their biggest decline since November. Worries about an economic slowdown in China led to a drop in prices for oil, copper, and other commodities, causing mining and energy stocks to fall. The rally had already slowed at the start of this month after reports suggested that the economy was slowing down.

"This is the first time in a while that we've had pretty positive numbers," said JJ Kinahan, chief derivatives strategist for TD Ameritrade. "We had one bad day yesterday. You can't say because of that one bad day that all bets are off."

Mining stocks were rising Tuesday as commodities markets stabilized. Gold, which was at the epicenter of Monday's sell-off, rose $28.30 to $1,389.40 an ounce.

The precious metal logged its steepest fall in 30 years Monday, plunging $140 an ounce in a frenzy of selling. Investors started dumping gold Friday after the government reported a drop in inflation. People often buy gold when they're fearful of rising prices and sell it when they see inflation ebbing.

Copper edged up 2 cents to $3.30 a pound. Crude oil fell 41 cents to $88.27 a barrel.

Materials stocks rose the most of the 10 industry groups in the S&P after leading the market lower the day before. Freeport-McMoRan Copper & Gold was up 0.7 percent at $29.49, a day after plunging 8 percent, the biggest drop in the S&P 500 index.

Home builders rose following the housing report. PulteGroup rose 38 cents to $18.24 and Lennar climbed 20 cents to $37.98.

Traders on the floor of the New York Stock Exchange observed a moment of silence to honor the victims of Monday's bombing attacks at the Boston Marathon.

In other trading, the Standard & Poor's 500 climbed 16 points, or 1 percent, to 1,568. The Nasdaq composite rose 37 points, or 1.2 percent, to 3,254.

Small company stocks rose even more than the broader market, a sign that investors are moving money into riskier assets. The Russell 2000 index climbed or 1.5 percent to 920.60. That's a reversal from the day before, when the index plunged 3.8 percent.

Among stocks making big moves:

Coca-Cola gained $2.18 to $42.27 after its first-quarter results came in above Wall Street's forecasts. Coke said it struck a deal to start refranchising its business in the U.S., which will lower costs.

W.W. Grainger Inc., which sells power tools and other industrial equipment, rose $16.73 to $242.40 after the company said its first-quarter net income climbed 13 percent.

U.S. Bancorp dropped 64 cents to $32.65 after the lender reported first-quarter earnings that fell short of analysts' expectations. The Minneapolis bank's net income rose 7 percent to $1.43 billion as it set aside less cash to cover soured loans.

Yields on U.S. government bonds rose as investors moved money out of safe-haven investments. The yield on the benchmark 10-year Treasury note climbed to 1.73 percent from 1.68 percent.














 




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