- The Washington Times - Friday, March 14, 2008

NEW YORK (AP) — Wall Street rebounded from an early plunge to finish moderately higher yesterday, after Standard & Poor’s predicted financial companies are nearing the end of the massive asset write-downs that have devastated the stock and credit markets.

The S&P; projection gave investors some hope that the seemingly unrelenting losses from the mortgage and credit crisis might indeed be bottoming out. Standard & Poor’s Ratings Services said it estimates write-downs of subprime asset-backed securities could reach $285 billion globally, up from its previous projection of $265 billion, but added that “the end of write-downs is now in sight for large financial institutions.”

“The S&P; comment was a positive for the market because investors were relieved to think that the subprime problem may be behind us,” said Al Goldman, chief market strategist at A.G. Edwards.

Wall Street clearly remains anxious, however. On Tuesday, the stock market launched its largest rally in more than five years after the Federal Reserve said it would auction $200 billion in Treasurys to help alleviate investment banks’ financial bind. But since then, stocks have been extremely volatile.

The S&P;’s note arrived on the heels of a spate of troubling news. A Carlyle Group fund warned late Wednesday it expects creditors will seize all the fund’s remaining assets. Meanwhile, the government reported Thursday an unexpected dip in retail sales, and a research firm said nearly 60 percent more U.S. homes faced foreclosure in February than in the same month last year.

The Dow Jones Industrial Average finished up 35.50, or 0.29 percent, at 12,145.74, after being down more than 220 points early in the session and then popping up more than 100.

Broader market indexes also recovered from steep early losses. The S&P; 500 Index rose 6.71, or 0.51 percent, to 1,315.48, while the Nasdaq Composite Index rose 19.74, or 0.88 percent, at 2,263.61. The Russell 2000 index of smaller companies rose 12.40, or 1.86 percent, to 679.71.

Bond prices fell as stocks rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.54 percent from 3.44 percent late Wednesday.

Japanese stocks tumbled 3.3 percent. Markets in Britain, Germany and France each lost about 1.5 percent.

As investors contend with tight credit markets, they also face weakness in the U.S. dollar and soaring commodities prices. The dollar dropped to fresh lows against the euro and fell below 100 yen during Asian trading yesterday, the weakest level for the greenback against the Japanese currency in 12 years. Gold surpassed the psychological benchmark of $1,000 an ounce for the first time, and crude oil briefly passed $111 a barrel.

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