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Stocks rebound from worst day of year


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Originally Posted Online: April 16, 2013, 1:20 pm
Last Updated: April 16, 2013, 1:22 pm
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NEW YORK (AP) — Strong housing and earnings reports helped stocks rebound from their worst day of the year.

The Dow Jones industrial average rose 129 points, or 0.9 percent, on Tuesday, to 14,728 as of 1:50 p.m. 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. Robust earnings from companies including Coca-Cola also propelled the market higher.

A recovery in 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 slowed earlier this month after reports of weak hiring and retail sales suggested that the economy was cooling off.

'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.'

While Chinese growth fell short of expectations, Monday's sell-off may have been disproportionate to the trend revealed by the data.

The world's biggest economy still expanded at a rate of 7.7 percent in the first three months of the year, missing analysts' expectations by just 0.3 percentage points. China is watched especially closely because it is a major market for foreign goods from iron ore to smartphones and is relatively healthy. Investors hope demand from China can help offset weakness in the U.S., Europe and Japan.

Mining stocks were rising Tuesday as commodities markets stabilized. Gold, which was at the epicenter of Monday's sell-off, rose $26.30 to $1,387.40 an ounce.

The precious metal logged its steepest fall in 30 years Monday, plunging 9.4 percent. Gold had been drifting lower since the start of the year and the decline accelerated 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.

Gold is down 27 percent since it climbed to a record in August 2011, when lawmakers wrangled over raising the debt ceiling and threatened to push the U.S. into default.

Copper edged up 3 cents to $3.30 a pound. Crude oil fell 12 cents to $88.58 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 0.8 percent at $29.50, a day after plunging 8 percent, the biggest drop in the S&P 500 index.

Home builders rose following the housing report. PulteGroup rose 66 cents to $18.51 and Lennar climbed 45 cents to $38.23.

In other trading, the Standard & Poor's 500 climbed 19 points, or 1.2 percent, to 1,571. The Nasdaq composite rose 42 points, or 1.3 percent, to 3,254.

Small company stocks rose more than the broader market, a sign that investors are moving money into riskier assets. The Russell 2000 index climbed or 1.4 percent to 920.13. That's a reversal from the day before, when the index plunged 3.8 percent.

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.

Among stocks making big moves:

Coca-Cola gained $2.14 to $42.23 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 $17.36 to $243 after the company said its first-quarter net income climbed 13 percent.

U.S. Bancorp dropped 71 cents to $32.60 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. Whirlpool Corp. jumped $2.94 to $116 after the appliance maker raised its quarterly dividend 25 percent to 62.5 cents.

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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  Today is Monday, Sept. 22, the 265th day of 2014. There are 100 days left in the year.

1864 -- 150 years ago: The board of education has granted Thursday as a holiday for the children, with the expectation that parents who desire to have their children attend the Scott County Fair will do so on that day and save irregularity the rest of the week.
1889 -- 125 years ago: The guard fence around the new cement walk at the Harper House has been removed. The blocks are diamond shape, alternating in black and white.
1914 -- 100 years ago: The Rev. R.B. Williams, former pastor of the First Methodist Church, Rock Island, was named superintendent of the Rock Island District.
1939 -- 75 years ago: Abnormally high temperatures and lack of rainfall in Illinois during the past week have speeded maturing of corn and soybean crops.
1964 -- 50 years ago: Installation of a new television system in St. Anthony's Hospital, which includes a closed circuit channel as well as the three regular Quad-Cities channels, has been completed and now is in operation.
1989 -- 25 years ago: When the new Moline High School was built in 1958, along with it were plans to construct a football field in the bowl near 34th Street on the campus. Wednesday afternoon, more than 30 years later, the Moline Board of Education Athletic Board sent the ball rolling toward the possible construction of that field by asking superintendent Richard Hennigan to take to the board of education a proposal to hire a consultant.






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