- The Washington Times - Wednesday, November 9, 2005

NEW YORK (AP) — Bombings at three hotels in Jordan erased most of an afternoon rally on Wall Street yesterday, leaving stocks with only marginal gains as fears about terrorism resurfaced.

The day ended with stocks such as Google Inc. and Marvel Entertainment Inc. down sharply. Before the bombings, stocks had advanced modestly as investors hoping for a fourth-quarter rally did their best to create one.

Investors had spent the morning worrying about consumer spending after Pepsico Inc. reduced its year-end forecast and said it would restructure. Traders were already concerned about spending after high-end home builder Toll Brothers Inc. cut its 2006 forecast Tuesday. A pullback by Pepsico’s much broader customer base is even more worrisome.

The morning’s declines triggered short-covering and program buying. Stocks were also boosted by portfolio churn as managers took profits where they could and moved into other equities.

The Dow Jones Industrial Average rose 6.49, or 0.06 percent, to 10,546.21.

Broader stock indicators also closed slightly higher. The Standard & Poor’s 500 Index rose 2.06, or 0.17 percent, to 1,220.65, and the Nasdaq Composite Index rose 3.74, or 0.17 percent, to 2,175.81.

Bond prices fell sharply, with the yield on the 10-year Treasury note rising to 4.65 percent from 4.55 percent late Tuesday. The U.S. dollar was mixed against other major currencies, rising near a two-year high against the euro on concerns about violence in France and political uncertainty in Germany. Gold prices rose.

Stocks remain nearly flat for the year and strategists are split between those who think a fourth-quarter rally is almost certain and those who recommend investors shift capital away from stocks and toward cash and bonds.

Advancing issues led decliners by nearly 8 to 7 on the New York Stock Exchange, where volume totaled 2.18 billion shares, up from 2 billion Tuesday.

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