Wall Street unable to sustain rally
NEW YORK - Wall Street has managed its second straight comeback, but the rebound was more a sign of the market's turmoil than strength.
Stocks closed moderately higher Friday after an erratic session that had investors tussling with concerns about the ongoing problems in the banking industry in response to more billion-dollar losses at Citigroup Inc. and Bank of America Corp. Yet investors were also heartened by plans for both banks to restore themselves to profitability, and they were also willing to place bets on a range of consumer and industrial stocks.
"It's that tug of war between problems and promise," said Alan Gayle, senior investment strategist at RidgeWorth Investments. "I think there is a bit of a sigh of relief that there is assistance coming for Citi and Bank of America, but it seems like there is an ongoing need for this assistance."
The companies' fourth-quarter losses - Citi said it lost $8.29 billion, while Bank of America lost $2.39 billion - were sobering reminders that the sagging economy is aggravating the problems that began with the mortgage crisis in 2007.
According to preliminary calculations, the Dow Jones industrial average rose 68.73, or 0.84 percent, to 8,281.22. The Dow was down 103 points in early afternoon; on Thursday, it recovered from a 205-point loss to close up 12.35.
The Standard & Poor's 500 index rose 6.38, or 0.76 percent, to 850.12, while the Nasdaq composite index rose 17.49, or 1.16 percent, to 1,529.33.
The indexes were down for the week, the result of selling in response to weak economic data and fears that fourth-quarter earnings reports, which begin next week in earnest, will point to a prolonged recession.
For the week, the Dow fell 3.7 percent, the S&P 500 lost 4.5 percent and the Nasdaq skidded 2.7 percent.
"We continue to see a tug of war between what has been some really bad economic data in recent weeks and optimism that the economy and financial markets are likely to stabilize and improve as we head through 2009," said Michael Sheldon, chief market strategist at RDM Financial. "There clearly are a lot of crosscurrents in the market."