U.S. stocks recovered from early losses to end the day slightly higher, helped by a rebound in energy, financial and technology shares. Volume was extremely light as investors, lacking in enthusiasm, refrained from taking big positions.
The Dow Jones industrial average, which at one point had given up as much as 84 points, rose 37.11 points, or 0.4%, to close at 9,580.63, its eighth consecutive advance. The broad Standard & Poor’s 500-stock index rose 2.86 points, or 0.28%, to 1,030.98. The tech-heavy NASDAQ composite index edged up 3.30 points, or 0.16%, to 2,027.73, helped by a late-session rally in technology shares. Treasuries fell, pushing the yield on 10-year notes up 0.3 point to 3.46%. On the New York Stock Exchange 1.16 billion shares exchanged hands and advancing shares were ahead of those that declined eight to seven.
This morning’s stock futures suggest moderate gains on the opening. Dow Jones industrial average futures are up 29, or 0.3%, at 9,596. Standard & Poor’s 500 index futures are up 4.40, or 0.4%, at 1,033.70, while Nasdaq 100 index futures are up 6.50, or 0.4%, at 1,645.50.
Technology issues rose in anticipation of better-than-expected earnings from Dell (NASDAQ:DELL). Leading the sector gains, however, were financial issues, up 0.9%, helped by a 27% surge in insurer AIG International’s (NYSE:AIG) shares. Rumors of ex-CEO Greenberg’s collaboration in asset sales, and the new CEO’s remarks suggesting there was no plan of any fire sale of the company’s assets generated an influx of interest in the stock that has risen more than 400% since July 9. CIT Group Inc. (NYSE:CIT) jumped 29 cents, or 22.8%, to $1.56. Citigroup Inc. (NYSE:C) rose 42 cents, or 9.1%, to $5.05 on reports in the New York Post that hedge fund manager John Paulson has acquired a 2% stake in the company.
Action was somewhat balanced on the DJIA where 16 stocks advanced and 13 declined with one ending the day unchanged. Boeing (NYSE:BA) led the advancing issues, as the company said it sees first test flight of its much-delayed 787 Dreamliner by the end of this year and first delivery by the fourth quarter of 2010. American Express (NYSE:AXP) shares rose 2.5%, helped by an advance in financial shares; a rise in commodity related stocks sent shares of Alcoa (NYSE:AA) up 1.1%. However, home construction shares lost favor on reports of a wider-than-anticipated loss at Toll Brothers (NYSE:TOL), as well as lower sales guidance for the fourth quarter.
Banks, which have suffered the most in the current economic turmoil, came under further scrutiny as The FDIC announced that it has added more banks on its “problem” list. The agency said it had 416 banks on its “problem” list at the end of the second quarter, up from 305 at the end of March. However, the three-month Libor, a global measure of liquidity for short-term borrowings by companies and consumers, continued to signal improved liquidity in the credit markets. On Thursday, Libor sank to a fresh, all-time low of 0.36%, down from 0.41% a week ago and an all-time high of 4.82% on October 10, 2008.
