MARKET REPORT

Buyers jump back into market

Specialist John McNierney (right) works Thursday at his post on the floor of the New York Stock Exchange.
Specialist John McNierney (right) works Thursday at his post on the floor of the New York Stock Exchange.

NEW YORK - The Dow Jones industrial average closed higher Thursday, regaining half of its Wednesday plunge, as buyers returned to the market.

The Dow rose 55.76 points, or 0.4 percent, to close at 14,606.11. On Wednesday it dropped 111.66, its worst fall in more than a month, after weak reports on hiring and the service sector. The decline was enough to make stock prices seem attractive again.

The Standard & Poor’s 500 index rose 6.29 points, or 0.4 percent, to 1,559.98. The Nasdaq composite rose 6.38 points, or 0.2 percent, to 3,224.98.

Three stocks rose for every two that fell on the New York Stock Exchange. Consolidated volume was lighter than usual at 3.2 billion shares.

“Investors have been looking for a reason to sell, given the rally we’ve seen in the market in the past couple of months,” said Joseph Tanious at JPMorgan Funds. “Today, you’re seeing investors come back into the market and buy on the dip.”

The stock market got off to a strong start in 2013. The Dow climbed 10 percent in the first three months of the year and closed at a record high of 14,662.01 on Tuesday. Investors have been encouraged by signs that the housing market was recovering and that hiring was picking up.

The market continued a steady advance through the first two weeks of March, but since then indexes have been alternating between gains and losses on a nearly daily basis as investors’ confidence in the U.S. economic recovery weakened.

There was more discouraging economic news Thursday. The number of Americans seeking unemployment aid rose to a four-month high of 385,000 last week, the Labor Department said. The government will issue its employment report today, which investors look at closely for insight into how the U.S. economy is doing.

“The trend seems to be worsening,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “We’re seeing a little hesitation in anticipation of tomorrow’s job report.”

Some industry groups rose Thursday. Telecommunications companies and utilities led the gains for the S&P 500, rising 1.3 percent and 0.9 percent.

So-called defensive industries, such as health care, consumer staples and utilities, which have stable earnings and dividends, have led the market rally this year. Investors have been seeking out stocks that give them similar characteristics to debt investments after a powerful rally in bonds over the past year pushed yields sharply lower. The yield on the benchmark 10-year Treasury note has traded below 2 percent for most of the last year.

The 10-year yield fell to 1.76 percent Thursday from 1.81 percent a day earlier, within a fraction of its lowest level of the year. The note’s yield has declined over the past month as demand for less risky assets increased following the financial crisis in Cyprus and signs of a slowdown in the U.S.

Japanese stocks jumped and the yen sank after the country’s central bank announced aggressive measures for getting the world’s third largest economy out of a two decade slump. The Bank of Japan, under new Gov. Haruhiko Kuroda, surprised markets by saying it would greatly increase the country’s money supply with the goal of encouraging people and businesses to borrow and spend. The yen weakened 3.6 percent against the dollar, and Tokyo’s Nikkei stock index rose 2.2 percent to 12,634.54.

Business, Pages 26 on 04/05/2013

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