Market climbs in midday trading
NEW YORK (AP) – Stocks rose Tuesday after investors tried to recover some of the big losses that piled up in recent weeks following a string of disappointing economic reports.
The jump in stocks came after traders looked past a report that growth in services businesses slowed last month. The Institute for Supply Management, a trade group of purchasing executives, said its index of services companies fell to 53.8 last month from 55.4 in May. Economists polled by Thomson Reuters forecast 55.0 for June. A reading above 50 indicates growth.
The report missed expectations but still signaled that the economy is growing. The weaker showing wasn’t a surprise to investors who have been seeing a stream of disappointing numbers.
Investors found reason to buy after two rough weeks. The Dow dropped 7.3 percent in the past two weeks and on Friday closed at its lowest level since early October. That has some institutional buyers looking to invest in some beaten-down stocks, according to Aaron Reynolds, senior portfolio analyst at Robert W. Baird in Milwaukee.
“There are pockets of opportunity out there. There are some areas with good valuations,” he said.
Overseas markets rose after investors found stock prices more attractive and Australia’s central bank issued an upbeat forecast for the country’s economy.
In midday trading, the Dow Jones industrial average rose 136.61, or 1.4 percent, to 9,823.24. The broader Standard & Poor’s 500 index rose 15.60, or 1.5 percent, 1,038.18, and the Nasdaq composite index rose 34.98, or 1.7 percent, to 2,126.77.
Stocks fell on Friday, the last trading day before the Independence Day holiday, after a report found that employers didn’t ramp up hiring as much as economists had forecast. It was the second straight month hiring by private employers failed to meet expectations.
Meanwhile, bond prices traded in a narrow range. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 2.97 percent from 2.98 percent late Friday.
Crude oil rose $1.47 per barrel to $73.61 per barrel on the New York Mercantile Exchange. Gold fell after demand for safety holdings fell.
About four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 417 million shares, compared with 391 million traded at the same point Friday.
The Russell 2000 index of smaller companies rose 6.87, or 1.2 percent, to 605.84.
Britain’s FTSE 100 rose 2.9 percent, Germany’s DAX index gained 2.2 percent, and France’s CAC-40 jumped 2.7 percent. Japan’s Nikkei stock average rose 0.8 percent.