AP
Stocks Get Lift From Goldman, Wal-Mart
Tuesday November 13, 5:52 pm ET
By Lauren Villagran, AP Business Writer
Stocks Lifted by Goldman Sachs' Good News on Subprime and Wal-Mart's Strong Earnings Report
NEW YORK (AP) -- Wall Street shot higher Tuesday, lifting the Dow Jones industrials nearly 320 points after reassuring news from Goldman Sachs Group Inc. and Wal-Mart Stores Inc. quelled some of the market's worst fears about the credit crisis and the economy. A plunge in the price of oil gave investors further incentive to buy.
Goldman Sachs heartened investors with word that it didn't expect a significant hit from the subprime mortgage turmoil. Goldman Chief Executive Lloyd Blankfein, speaking at a conference held by Merrill Lynch & Co., said the bank has a short position in the subprime mortgage market and won't be taking any significant charges to write off losses.
Goldman's news helped offset an announcement from Bank of America Corp., which joined other big financial companies including Citigroup Inc. and Merrill Lynch that have recently revealed heavy writedowns from soured mortgages; BofA said it will record $3 billion in pretax writedowns in the fourth quarter.
Goldman's assessment was the first substantial good news from the financial services industry about a company's credit exposure, and was comforting to investors whose fears about widening credit problems have sent Wall Street plunging over the past month.
"People just want to know what's out there," said Todd Leone, managing director of equity trading at Cowen & Co. "They want to feel like they're being told the truth."
Meanwhile, Wal-Mart, the world's largest retailer, reported third-quarter profit surpassed projections and hinted that consumer spending might be stronger than anticipated this holiday shopping season. The results also showed that heavy discounting during the period did not hurt margins, which the company said bodes well for the fourth quarter.
A sharp pullback in energy prices also encouraged Wall Street. Oil prices plummeted after the International Energy Agency reduced its expectations for demand in the fourth quarter and next year and said crude supplies are growing. Light, sweet crude for December delivery fell $3.45 to settle at $91.17 a barrel on the New York Mercantile Exchange.
The Dow rose 319.54, or 2.46 percent, to 13,307.09.
A day earlier, a turbulent session pushed the Dow below 13,000 for the first time since August. Tuesday's advance snapped a four-day losing streak for the blue chip index.
Broader indexes also rose sharply Tuesday. The Standard & Poor's 500 index jumped 41.86, or 2.91 percent, to 1,481.04, and the Nasdaq composite index gained 89.52, or 3.46 percent, to 2,673.65.
"Over the last week there has been so much bloodshed on the Street, it's finally enticed people back to the market," said Ryan Larson, senior equity trader at Voyageur Asset Management. "At some point, it's hard to turn your head when all these issues become so cheap."
Bonds fell as investors moved back into stocks. The yield on the benchmark 10-year Treasury note rose to 4.26 percent from 4.22 percent late Friday. The market was closed Monday in observance of Veterans Day.
Gold prices declined, settling at $799 an ounce on the Nymex. It was the first close below $800 since Nov. 2. The dollar was mixed.
Investors were expected to position their portfolios ahead of key economic data out during the week. Two key barometers of inflation and the economy will be released, with the Labor Department's Producer Price Index on Wednesday and the Consumer Price Index on Thursday.
News in the troubled housing market was mixed Tuesday, but didn't spoil Wall Street's rally. The National Association of Realtors said its index for pending home sales edged higher in September at a seasonally adjusted annual rate of 0.2 percent to 85.7 from 85.5 in August. It was the first increase since June. However, the trade group said it expects the market slump to worsen into 2008.
Goldman shares gained $18.33, or 8.5 percent, to $233.04, while Bank of America added $2.29, or 5.2 percent, to $46.27.
Wal-Mart spiked $2.65, or 6.1 percent, to $45.97 after the retailer said quarterly profit rose 8 percent as it heads into the holiday shopping season. Chief Executive Officer Lee Scott said it has been a tough year for consumers, but that the company's new focus on pricing is paying off.
TJX Cos. -- the operator of T.J. Maxx and Marshalls -- reported third-quarter profit rose 13 percent. Results, which missed Wall Street expectations, were hurt by unseasonably warm early fall weather. Shares added $1.10, or 3.8 percent, $30.42.
Home Depot Inc., the world's largest home improvement chain, reported third-quarter results fell 26.8 percent because of the continuing slump in the housing sector. Shares rose 66 cents, up 2.3 percent, to $29.12.
Troubled lender Countrywide Financial Corp. said total mortgage origination volume fell 48 percent in October due to continued weakening of the mortgage market and the company's decision to cut down on its subprime lending operations. However, shares rose 53 cents, or 4 percent, to $13.72 after Countrywide said it significantly reduced some of its riskier loans that triggered recent financial problems.
The Russell 2000 index of smaller companies rose 22.06, or 2.88 percent, to 789.15.
Advancing issues led decliners by roughly 5 to 1 on the New York Stock Exchange, where consolidated volume came to 4.02 billion shares, down from Monday's 4.11 billion.
Overseas, Japan's Nikkei stock average fell 0.46 percent and Hong Kong's Hang Seng index rose 0.50 percent. In Europe, Britain's FTSE 100 rose 0.39 percent, Germany's DAX index fell 0.38 percent, while France's CAC-40 added 0.06 percent.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
Tras la caída del precio del petróleo en más de cuatro dólares, las acciones estadounidenses rompieron la racha de cuatro días de pérdida; el Nasdaq cerró con sus mayores ganancias desde hace 4 años luego de que Apple Inc. anunciara que vendería iPhones en China, incentivando a la compra de acciones tecnológicas.

Goldman Sachs Group Inc. y Wal-Mart Stores Inc. apaciguaron las preocupaciones por la crisis crediticia, y Goldman Sachs dijo que no esperaban mayores pérdidas por la crisis subprime, y sofocó las preocupaciones por los anuncios de pérdidas desmesuradas por parte del Bank of America, Citigroup y Merrill Lynch. Pese a los anuncios del Bank of America de que tendría unos US$3.000 millones adicionales de pérdidas en el cuarto trimestre, sus acciones subieron en 5,2% hasta $46.27.

Wall Street registró sus primeras ganancias desde hacía ya cuatro días.

La caída del petróleo – que se hundió en cuatro dólares hasta los $92 – también instó a los inversores a elegir otras acciones; por su parte, el Nasdaq había sufrido pérdidas en estos cuatro días de más de 8%, pero las acciones de Apple se dispararon en más de 10,5% y Corning Inc. también colaboró a la cotización del Nasdaq con 10%. Por su parte, Goldman Sachs trepó en 8,5%, y Wal-Mart en 6,1%.

Las acciones de Google Inc. se acrecentaron – colaborando también al Nasdaq – en un 4,5% al terminar en $660,55.

En total, el Nasdaq ascendió un notable 3,46%, representados en 89,52 puntos, y cerró en 2673.65. El Dow Jones Industrial Average aumentó un 2,46% hasta los 13.307,09 tras una subida de 319,54 puntos, y el Standard & Poor's 500 Index ganó 41,87 puntos, o 2,91%, para cerrar en 1.481,05. Los avances del Dow Jones y del S&P 500 han sido los mayores desde el recorte de la tasa directriz de la Fed en septiembre, cuando redujo ésta en medio punto.

Además del petróleo, el oro cerró en $799 por onza en su primer cierre por debajo de los $800 desde el 2 de noviembre.

Más de 1,66 mil millones de acciones fueron comerciadas en el New York Stock Exchange, en un valor menor al promedio del año pasado de 1,84 mil millones, Sin embargo, en el Nasdaq más de 2,66 mil millones cambiaron de manos, sobre el promedio del año pasado de 2,02 mil millones.

En otras bolsas internacionales, el Nikkei nipón bajó en 70.46 (0.46%) puntos, mientras que el Dax de Fránkfurt cerró en 7777,56 con pérdidas de 29.28 (0.38%).