Nov 2, 2009 1:00 pm US/Pacific
Stocks Waver; Dow Gives Up Triple-Digit Gain
NEW YORK (AP) ―
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Traders work on the floor of the New York Stock Exchange moments before the closing bell on Oct. 30, 2009, in New York City.
Chris Hondros/Getty Images
An early rally in stocks is losing steam as a retreat in financial stocks pulls the broader market lower.
Stocks had been rising in the early going after stronger-than-expected reports on manufacturing and housing. By early afternoon though, stocks were fluctuating. The Dow Jones industrials were up about 24 points, after rising as much as 146 points in early trading.
The market has been extremely volatile in recent days as investors try to determine whether the bets they've been placing on a rebound in the economy over the past several months have been sound.
Investors worry the pace of the economic recovery will be hard to maintain, considering that much of the growth has been fueled by government stimulus programs, while corporate profits have largely been driven by cost-cutting instead of higher sales.
The seesaw trade on Monday came after the Institute for Supply Management said the manufacturing industry grew at the fastest pace in October since April 2006. The ISM manufacturing index clocked in at 55.7, much better than the 53 economists had expected. It was the third month in a row the index came in above 50, which indicates growth.
Meanwhile, the National Association of Realtors said pending home sales increased for the eighth straight month in September. The index rose 6.1 percent from August to 110.1. It was the highest reading since December 2006 and more than 21 percent above a year ago. Economists had expected the index would be level at 103.8.
Stocks posted their biggest losses in four months on Friday after rising sharply a day earlier on stronger-than-expected economic growth in the third quarter. Friday's losses helped send the Standard & Poor's 500 index into the red for the month of October, breaking a seven-month streak of gains.
But even with the S&P 500's 2 percent loss in October, the index is still up 53.2 percent from a 12-year low in March.
"The question is, is the trend changing?" said Jim Dunigan, managing executive of investments at PNC Wealth Management. "We've been in an up trend here."
The Dow Jones industrial average rose 23.66, or 0.2 percent, to 9,736.39. The Standard & Poor's 500 index fell 0.63, or 0.1 percent, at 1,035.56, and the Nasdaq composite index fell 7.17, or 0.4 percent, to 2,037.94.
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Timeline: U.S. Credit Crunch & Financial Failures
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