Hints of stabilizing economy spark late stock rally
NEW YORK -- Stocks closed higher as investors snatched up shares of consumer product makers and financial companies Wednesday as they latched onto signs that the recession could be easing its chokehold on the economy.
Early caution gave way to a rally in the last hour of trading as investors looked for stocks that could benefit from a rebound. Technology stocks lagged after Intel's tightlipped forecast caused jitters about a corner of the market that had drawn buyers over the past month.
Money flowed into stocks like Procter & Gamble, which boosted its dividend, and American Express, which said it is having to write off less bad debt.
"The market may not be seeing concrete signs of a recovery, but there are specks of light that we're on the road to stabilization," said Ryan Larson, senior equity trader at Voyageur Asset Management.
According to preliminary calculations, the Dow Jones industrial average rose 109.44, or 1.4%, to 8,029.62.
The Standard & Poor's 500 index rose 10.56, or 1.3%, to 852.06. The tech-heavy Nasdaq composite index edged up 1.08, or 0.1%, to 1,626.80 after losing ground for most of the day because of disappointment about Intel's report.
More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.5 billion shares.
Lackluster economic readings early in the day offered reminders of the economy's troubles. But other signs emerged that the economy could be stabilizing as the day wore on. That idea that the recession is at least not worsening has pushed stocks up by more than 20% in the past five weeks.
The government reported that production at the nation's factories, mines and utilities fell 1.5% in March, the fifth straight month of decline and worse than the 1% dip analysts expected.
Consumer prices fell 0.1% last month as a drop in energy prices offset the biggest rise in tobacco prices in more than a decade. It was better than the 0.1% rise economists had expected but still reflected weaker business activity.
Related Stories
ABC News Live