U.S. stocks closed almost unchanged on Thursday, managing to make up earlier losses as hopes that the Fed would soon take corrective measures to prop up the economy helped offset concerns about banks’ foreclosure practices. The Dow average snapped a four-day winning streak.
Disappointing economic data and allegations that banks used improper ways to handle foreclosures unnerved investors in the early going. However, as markets fell, investors soon began to hunt for bargains, sending indices higher. Financials led on the downside.
After falling nearly 70 points in the morning session, the Dow Jones Industrial Average closed with a drop of nearly 2 points. The tech-heavy Nasdaq Composite index dropped nearly 6 points, or 0.2%, to 2,435.38 while the Standard & Poor’s 500-stock index fell 4.29, or 0.4%, to 1,173.81.
Financials sold off amid concerns about their mortgage foreclosure practices. Bank of America (NYSE:BAC) fell 5.1%to $12.60. Bank of America was the leading decliner on the Dow. Shares in JPMorgan Chase (NYSE:JPM) retreated 1.1%to $38.72. Citigroup Inc. (NYSE:C) dropped 4.4% to $4.06 and Wells Fargo & Co. (NYSE:WFC) closed off 4.2% at $24.72. The KBW Bank Index fell 2.6%.
Yahoo (NASDAQ:YHOO) rose 4.1% after a Wall Street Journal report said AOL and a number of other private equity firms, including Blackstone Group and Silver Lake Partners are considering making a bid for the Internet company.
The bond market had a mixed day Thursday. Prices of the benchmark 10-year Treasury note fell, sending the yield up to 2.46% from 2.42% late Wednesday.
Seven of the ten S&P 500 industry sectors closed with losses, with financials, off 1.5%, leading on the downside. Basic materials (-0.8%), industrials (-0.4%), consumer services (-0.4%), health care (-0.2%), utilities (-0.2%), and oil and gas (-0.04%) were the other losers. Consumer goods (+0.2%), telecommunications (+0.1%) and tech shares (+0.03%) closed with slender gains.
Gold continued to shine on its safe-haven appeal, rising $7.10 to $1,377.60. Crude prices fell $0.32 to finish at $82.69 after a government report noted US petroleum demand was at its lowest in more than ten months.
The CBOE Vix, considered as market’s measure of volatility, increased 4.3% to 19.88. The US dollar sank to a 10-month low of 76.881 against a basket of currencies. A government report showed August’s trade deficit increased to $46.3 billion from $42.85 billion earlier, beating economists’ estimates of $44.5 billion.
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