-Caveat Lector- Dow Climbs More Than 300 Points
Wed Jul 24, 3:02 PM ET By SETH SUTEL, AP Business Writer NEW YORK (AP) - Stock prices turned around sharply Wednesday, shaking off an early slump as investors welcomed positive news about corporate scandals, the issue that has brought the market to five-year lows. The Dow Jones industrials soared more than 300 points in late afternoon. The arrest of the founder of Adelphia Communications Corp., who has been accused of looting the now-bankrupt cable company, lifted the spirits of investors demoralized by a string of accounting and ethics problems. The market was also buoyed by news that negotiators for the House and Senate have reached agreement on legislation to crack down on corporate fraud. President Bush ( news - web sites) has said he wants the legislation done this week. Wednesday's late surge was one of the biggest signs of life in the market in weeks. However, it was still indicative of the volatility that has swept over Wall Street lately. After falling more than 170 points in early trading, the Dow was up 314.08, or 4 percent, at 8,016.42 in midafternoon. The Nasdaq composite index was up 18.85, or 1.5 percent, at 1,247.90. The Standard & Poor's 500 index was up 25.60, or 2.3 percent, at 823.30. The market has been struggling over the past several weeks as brief respites of buying on improving fundamental data, such as better corporate earnings and good signs about the economy, have been overwhelmed by pessimism linked to a string of corporate scandals. Rod Smith, an investment strategist with Wachovia Securities in Richmond, Va., said the market was bound to hit a turnaround given the rapid rates of declines over the past few weeks. The Dow lost 840 points over the past four sessions alone. Bill Barker, an investment strategy consultant at RBC Dain Rauscher in Dallas, said technical factors played a major role in the rally Wednesday as many traders were forced to buy back stock that they had sold short. In short trades, investors sell borrowed stock, expecting the market to fall; when the market then rises, they are forced to buy stock to pay back the debt. "I think the market is increasingly being dominated by short-term traders," Barker said. "We need to convince investors that corporate America is not crooked." However, Barker noted that it was very interesting that the market began to rally shortly after the arrests of the founder of Adelphia and his two sons were reported. The accounting scandal at Adelphia has been one of several that have been weighing on market sentiment. "The market has been waiting for this," Alan Ackerman, vice president at Fahnestock & Co., said of the Adelphia arrests. "We have a big turnaround in process, but whether it will last or not is a big question. Some of this is based on the fact that the House and Senate appear to have made progress on corporate reforms." Some companies were rewarded for positive earnings reports Wednesday. Reebok blew away analysts' estimates of 30 cents per share by 9 cents a share, and its stock was up 97 cents at $24.28. DuPont was also up after reporting it swung to a profit in the second quarter, despite falling sales, after posting several charges last year. The chemical maker rose $2.14 to $39.18. Among Dow components, several major blue-chips also had big gains. Energy giant ExxonMobil was up $2.11 at $33.03, and J.P. Morgan Chase shook off previous losses to trade up $2.52 at $22.63. Declining issues just outnumbered advancing ones on the New York Stock Exchange ( news - web sites). Volume was very heavy. The markets have been on an unrelenting slide since mid-May, bringing major indicators to levels not seen in at least four years. "When you start to fall at a rate of 100 percent per annum, that is not sustainable," Smith said. "At some point we'll have a rally that lasts longer than a day or two. This may be the start of that, it may not be — nobody knows." On Tuesday the S&P 500, a broad index of major blue-chip companies, closed below 800 for the first time since April 1997. The Dow has fallen to its lowest close since October 1998 and the Nasdaq has dropped to its lowest close since May 1997. The Russell 2000 index was up 6.44, or 1.8 percent, Wednesday to 370.43. Overseas markets also fell Wednesday, but recovered some of their earlier losses after Wall Street pared its own deficit. Germany's DAX index was up 3.3 percent, recovering from a steep drop earlier. Britain's FTSE 100 was down 2.1 percent, and France's CAC-40 was down 1.5 percent. Japan's Nikkei stock average fell 2.6 percent. ------------------------ "In little more than a year we have gone from enjoying peace and the most prosperous economy in our history, to a nation plunged into war, recession and fear. This is a nation being transformed before our very eyes." http://www.truthout.com Steve Wingate, Webmaster ANOMALOUS IMAGES AND UFO FILES http://www.anomalous-images.com <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://peach.ease.lsoft.com/archives/ctrl.html <A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of [EMAIL PROTECTED]</A> http:[EMAIL PROTECTED]/ <A HREF="http:[EMAIL PROTECTED]/";>ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
