Stocks surge on better-than-expected factory survey
NEW YORK -- Stocks rebounded Thursday after the previous session's plunge, with investors eager to take advantage of bargains and cheered by a milder-than-expected drop in manufacturing activity in the Philadelphia region. The Dow Jones industrial average rose more than 260 points.
A plunge in commodities prices also gave investors some hope that lower energy and food prices might boost consumers' discretionary spending and ease inflation concerns. Crude oil fell below $100 a barrel on the New York Mercantile Exchange, while gold prices fell, capping the biggest weekly decline since 1990.
Thursday is the last day of trading this week in the USA. Markets are closed Friday in observance of Good Friday.
Stocks had wobbled in the early going Thursday after the Labor Department said the number of newly laid off workers filing for unemployment benefits rose last week by a more-than-expected 22,000 to 378,000. That level is the highest in nearly two months.
But Wall Street found reason to buy back into stocks when the Philadelphia Federal Reserve said manufacturing activity is dropping in March by less than it did in February, and by less than many economists anticipated
The Dow rose 261.66, or 2.16%, to 12,361.32. In the broader market, the Standard & Poor's 500 index rose 31.09, or 2.39%, to 1,329.51, and the Nasdaq composite index rose 48.15, or 2.18%, to 2,258.11.
Investors appeared relieved about the Philadelphia Fed's report, but economic jitters are far from alleviated. On top of the disappointing jobless claims report, the Conference Board said Thursday that its index of leading economic indicators fell, as expected, for the fifth straight month in February.
The markets are apt to stay volatile for some time, as investors digest news on the economy and the troubled financial sector.
"It's the every-other-day theory — up one day, and down the next," said Scott Brown, chief economist at Raymond James & Associates.
On Wednesday, stocks tumbled, giving back much of Tuesday's big advance as investors grew worried — once again — about the possibility of further troubles at banks with mortgage-related debt on their books. After surging 420 points on Tuesday, the Dow dropped nearly 300.
