Dow Jones Industrial Average Up 423 Points at Close, Stocks Surge
Wall Street storms back.
Aug. 11, 2011— -- The Dow Jones industrial average finished up 423.37 points, or 3.95 percent, to 11,143.31 on Thursday. The Standard & Poor's 500 Index shot up 51.88 points, or 4.63 percent, to 1,172.64. The Nasdaq was up 111.63 points, or 4.69 percent, at 2,492.68. U.S. stocks moved sharply higher today after nearly a week of steep losses over debt fears here and in Europe.
The Dow plunged 634 points Monday, soared 429 points Tuesday, and dove 519 points Wednesday. It's the first time the Dow has ever had four straight 400-point days.
Carlton Neel, who manages about $2 billion as a senior portfolio manager at Virtus Investment Partners, told the Associated Press that investors are so scared of being the last one out of the market in a downturn or the last one in during a rally that they are stampeding in herds, creating more volatility. "Fear tends to be a much more powerful emotion, and the sell-offs tend to be more violent than the rallies," he said. "But people are worried about missing the bottom, so you will have a few melt-ups along the way.
Investors reacted positively to a bit of good news among the gloom: New U.S. claims for unemployment benefits dropped to a four-month low last week, the government reported today. Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said, the lowest level since the week ended April 2.
Tech giant Cisco turned in an earnings report with better-than-expected sales, sending the shares up 17 percent. CEO John Chambers reported "solid progress" on the networking equipment firm's turnaround effort.
The markets here and abroad were also buoyed by an announcement that French President Nicolas Sarkozy and German Chancellor Angela Merkel will meet in Paris next Tuesday to discuss euro zone governance and other international issues.
Investor worries over French banks have weighed on the stocks over the past two days.
U.S. stocks skidded Wednesday on new worries about government debt in Europe, losing all of Tuesday's rally and then some. Gold, which surged to yet another new high yesterday, fell back $25 to $1,758 an ounce today.
By the time the market closed Wednesday, the S&P 500 was down 51 points, or 4.4 percent, while the Nasdaq fell 101 points, or 4 percent, to 2,381. But the price of gold surpassed $1,800 an ounce for the first time as investors pulled their money out of stocks and snapped up precious metals.
In Europe today, stocks traded higher, with the major indexes up 1 percent to 2 percent.
