Wall Street closes up after rocky day
US stocks mostly rose in a volatile session yesterday as stronger-than-expected economic data and German approval of a beefed-up Eurozone crisis fund relieved two of the worst fears hanging over the market.
But the Nasdaq was knocked lower by a brutal sell-off in US-listed Chinese stocks on news of a probe into accounting practices and profit taking in Apple shares after a huge gain during the quarter.
The US Labor Department said initial claims for unemployment benefits fell to a five-month low last week.
Europe again averted disaster in its debt crisis when German deputies rallied behind Chancellor Angela Merkel to approve a stronger Eurozone bailout fund yesterday.
The Dow Jones industrial average gained 143.08 points, or 1.30 per cent, to 11,153.98. The Standard & Poor’s 500 Index gained 9.34 points, or 0.81 per cent, to 1,160.40. But the Nasdaq Composite Index dropped 10.82 points, or 0.43 per cent, to 2,480.76.
Chinese Internet search engine Baidu, down 9.2 per cent at $110.29, and other US-listed Chinese companies were among the biggest losers after a securities regulator said the US Justice Department was investigating accounting irregularities at Chinese companies listed on US exchanges.
Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, said the news was a negative for sentiment at a time when markets were already experiencing high uncertainty and volatility.
Tech names pressured the Nasdaq, with Amazon off 3.2 per cent at $222.44 following a sharp rally in Wednesday’s session. Advanced Micro Devices sank 13.7 per cent to $5.31 after cutting its third-quarter revenue outlook, prompting many analysts to downgrade their views on the stock.
Apple shares fell 1.6 per cent on profit taking after gaining more than 16 per cent during the quarter.
Other big-cap Internet names were also down. Netflix sank 11 per cent while Yahoo Inc lost 5.4 per cent.
Market volatility is likely to remain high as traders react to European headlines and attempt to gauge the commitment of governments and institutions as they work to prevent a Greek default.
About five stocks rose for every two that fell on the New York Stock Exchange. On the Nasdaq, more than five stocks rose for every three that fell. About 8.62bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above this year’s average.