- The Washington Times - Wednesday, March 14, 2007

NEW YORK (AP) — Wall Street gyrated and then steadied itself yesterday, closing with a respectable advance although the Dow Jones Industrial Average fell as much as 136 points and briefly dropped below the 12,000 mark before recovering.

Stocks bounced back and forth a day after concerns about faltering subprime mortgage lenders sparked a broad sell-off. H&R; Block Inc. had added to Wall Street’s uneasiness by announcing after the closing bell Tuesday its fiscal third-quarter losses would rise because of a $29 million write-down at its mortgage arm.

“I think the market got below 12,000 and buyers came in,” said Todd Leone, managing director of equity trading at Cowen & Co.

The Dow rose 57.44, or 0.48 percent, to 12,133.40.

The Dow first climbed above the 12,000 level on Oct. 18, after a meandering, 7 year journey from the 11,000 mark.

Broader stock indicators also rose yesterday. The Standard & Poor’s 500 Index advanced 9.22, or 0.67 percent, to 1,387.17, and the Nasdaq Composite Index rose 21.17, or 0.90 percent, to 2,371.74. The Russell 2000 Index of smaller companies rose 6.56, or 0.85 percent, to 775.68.

Bonds fell as stocks bandied about; the yield on the benchmark 10-year Treasury note rose to 4.52 percent from 4.50 percent late Tuesday.

Light, sweet crude settled up 23 cents at $58.16 per barrel on the New York Mercantile Exchange.

“I think people right now don’t know what to make of this market,” said Larry Peruzzi, senior equity trader at Boston Company Asset Management. “You look like a hero right now if you bought when the Dow was down 120 points and if you sold you look like a goat.”

Mr. Peruzzi said stocks recovered after indexes neared technical levels and that the higher close in crude prices lent a boost to energy stocks. Exxon Mobil Inc. rose $1.11 to $71.02, while ConocoPhillips rose $1.32, or 2 percent, to $67.91.

Wall Street’s turbulence came as stocks in Europe closed sharply lower, apparently seeing little room for optimism U.S. markets would rebound. Britain’s FTSE 100 fell 2.61 percent, Germany’s DAX lost 2.66 percent, and France’s CAC-40 fell 2.52 percent. Japan’s Nikkei stock average closed down 2.92 percent, while Hong Kong’s Hang Sang fell 2.57 percent and the Shanghai Composite Index fell 1.97 percent.

The dollar, which was mixed against other major currencies, rose against the yen.

Following Tuesday’s sobering declines in stocks, investors appeared to find little reassurance in a General Motors Corp. report that it turned a profit for the fourth quarter, its first since the first quarter of 2006. GM, which fell 26 cents to $30.25, benefited from a big gain from the sale of about half its stake in its General Motors Acceptance Corp. financing arm.

But trouble at GMAC’s Residential Capital LLC real estate financing business added to investor concern Tuesday after ResCap said it has struggled with a slower pace of loan originations and a further erosion in its subprime business.

H&R; Block, the nation’s largest tax preparer, said it would delay filing its annual report and that the reduced value of its mortgage business pushed its quarterly loss higher. The stock rose 9 cents to $20.14 after spending most of the day lower.

The deficit in the broadest measure of foreign trade narrowed by 14.6 percent in the final quarter of 2006 to $195.8 billion, the smallest quarterly imbalance since the summer of 2005. A lower foreign oil bill took received some credit. For 2006, the Commerce Department said the current account deficit, which reflects not only trade in goods and services but also investment flows between countries, set a record for the fifth consecutive year.

The Labor Department said the prices of imported goods rose 0.2 percent in February when excluding oil prices. In January, import prices fell 0.9 percent.

Weighing in again with mortgage data, the Mortgage Bankers Association said yesterday its weekly mortgage index, which measures mortgage loan application volume, rose 2.8 percent on a seasonally adjusted basis from the prior week. On Tuesday, the group’s report that new foreclosures jumped to their highest-ever level in the fourth quarter of 2006 helped touch off the day’s cavalcade of sell orders.

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