Rebounds Vs Recoil in Indian Markets

Wall St rebounds on IBM, financials  -  Thu, Jan 22 03:10 AM

Courtesy : Yahoo News

Indian markets had a tough time bouncing back as the Asian stock markets were trading mixed and brought the SENSEX down by  

U.S. stocks jumped on Wednesday, rebounding from a two-month low, after a surprisingly healthy earnings report from IBM fueled optimism that technology may fare better than other sectors during the recession.

Financial stocks outperformed as well on the strength of earnings surprises from Northern Trust and PNC Financial Services, helping the group reclaim some of Tuesday's massive losses that dropped the financial sector to a 14-year low.

The market shrugged off a brief sell-off after Treasury Secretary nominee Timothy Geithner faced tough questioning at his confirmation hearing before a Senate committee.

The day after earnings results from State Street alarmed investors about losses in one of the safest parts of banking, earnings from rival Northern Trust Corp on Wednesday soothed investor concerns after its net income more than doubled. The financial services company's shares shot up nearly 31 percent to $57.51.

PNC Financial Services Group Inc also projected lower loan losses from its purchase of National City Corp, sending its shares soaring 37 percent to $30.16.

"People are excited because financials are valued so low at this point. It's the mentality that they can't get any lower, but they've proven time and time again that they can," said Jocelynn Drake, market analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

The Dow Jones industrial average gained 279.01 points, or 3.51 percent, to 8,228.10. The Standard & Poor's 500 Index rose 35.02 points, or 4.35 percent, to 840.24. The Nasdaq Composite Index climbed 66.21 points, or 4.60 percent, to 1,507.07.

International Business Machines Corp provided the biggest lift to the Dow, jumping nearly 12 percent to $91.42 after the world's top technology services company posted a quarterly profit and a 2009 profit outlook that surpassed Wall Street's expectations. That burst of strength from IBM led investors to believe the Dow component can weather the global economic downturn.

Hearings on Geithner's appointment attracted the market's attention for much of the day as he is seen as President Barack Obama's point man in battling the economic crisis. As the president of the Federal Reserve Bank of New York since 2003, Geithner is expected to hit the ground running if confirmed as Treasury secretary.

A day after his historic inauguration, Obama met with his economic advisers, who are working with the Democratic-led Congress on an $825 billion fiscal stimulus package.

The  drove gains in the S&P 500 following Tuesday's sharp sell-off, which was ignited by deepening fears of insolvency among banks.

The broad KBW index of bank stocks and the S&P financials index both jumped 14.6 percent.financial sector

Bank of America shares climbed 31 percent to $6.68 after Chief Executive Kenneth Lewis purchased 200,000 common shares, four days after the  posted its largest quarterly loss in 17 years.

JPMorgan Chase ranked as the Dow's second-biggest advancer, surging 25.1 percent to $22.63.company

On the downside, Wal-Mart Stores Inc was the heaviest weight on the Dow after being downgraded to a "neutral" rating by Credit Suisse. Shares of Wal-Mart, the world's largest retailer and leading discount chain, slid 2.8 percent to $49.14.

Apple led the Nasdaq higher ahead of its quarterly earnings after the closing bell, despite a report that U.S. regulators were examining the company's disclosures about Chief Executive Officer Steve Jobs' health problems to ensure investors were not misled. Apple's stock rose 5.9 percent to $82.83.

Trading volume was active on the New York Stock Exchange, with about 1.74 billion shares changing hands, above last year's estimated daily average of roughly 1.49 billion, while on Nasdaq, about 2.12 billion shares traded, below last year's daily average of 2.28 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of 4 to 1, while on the Nasdaq, about three stocks rose for every one that fell.