NEW YORK -U.S. blue-chip stocks closed higher Friday in a day of whipsawed trading, as investors struggled to digest a better-than-expected jobs report with news of progress in the euro-zone debt crisis.
The Dow Jones Industrial Average finished up 60.93 points, or 0.54%, at 11444.61. The blue-chip index gained as much as 172 points in early trading after a better-than-expected jobs report, but lost those gains within the first half hour of trading and dropped as much as 245 points at its morning low.
The measure bounced off the lows in the early afternoon as investors cheered news that Italy will speed up its fiscal consolidation timetable. Italian Prime Minister Silvio Berlusconi pledged to push labor reforms and said Italy would balance its country's budget by 2013, a year earlier than planned.
The comments came at a hastily called news conference in an effort to quell fears about the euro zone's third-largest economy.
"The somewhat stabilizing news out of Europe is allowing us to bounce from very oversold levels," said Tom Donino, co-head of trading at First New York Securities.
The Standard & Poor's 500-stock index edged lower by 0.69 point, or 0.06%, to 1199.38. The technology-oriented Nasdaq Composite Index tumbled 23.98 points, or 0.94%, to 2532.41.
Investors came into Friday's trading with bated breath after a roller-coaster week during which many began to lose faith in the ability and willingness of governments to contain a snowballing crisis.
The Dow tumbled 513 points Thursday, its biggest point drop since Dec. 1, 2008. It is in the red for the year and has fallen more than 10% below the 2011 closing high in April, putting the measure squarely in correction territory.
The action comes as the U.S. economy added 117,000 jobs last month, more than economists were expecting. The unemployment rate edged lower to 9.1%. The better-than-anticipated jobs report, however, wasn't enough to convince investors that the troubles affecting the economy are over. Recent reports have shown a drop in consumer spending, a slowing manufacturing sector and sluggish economic growth.
"One nice number isn't enough to change sentiment at the moment," said Ted Weisberg, president of Seaport Securities. "Folks are scared and want to take risk off the table.
Opening bell on Wall Street was likely just a sour note for many of us Friday morning. That's after the pain Thursday when the Dow Jones Industrial Average lost more than 512 points. All the gains made this year have been lost.
So what do you do now? "You don't make big changes on a day when the market has fallen," says Iris Dayoub, president of Alpha Financial Management.
You may be freaked out, but she says don't make drastic moves. "I don't think anyone should be doing anything today frankly, if they have an investment strategy they've been comfortable with, they should stay the course," she tells me.
Dayoub was encouraged by Friday's job report which showed more positive news than frankly some had expected, including the fact in May and June numbers were revised upward. She thinks the recent debt drama in Washington, D.C. may have spurred on Thursday's crisis. "Yes, I think we did set the stage for it so people were already anxious in a normal time wouldn't have paid that much attention to it," she says.
Dayoub says the issue with many investors is that they try to time the market and make mistakes over and over.
For those who decide the market may be too risky, she says make changes gradually. "And if you have a 401K at work, keep making contributions, especially if the company is putting money in," she says. "Because right now you're buying at a really low price and that's what we like to do, buy low and sell high.
No comments:
Post a Comment