Stock Market Cuts Its Losses with a Late Rally

Stock Market Cuts Its Losses with a Late Rally By CHRISTINA REXRODE

NEW YORK -- A late recovery on Wall Street wiped out most of the stock market's losses Thursday, leaving the Dow Jones industrial average down just 25 points.

The Dow had been down as much as 177 points but came back sharply in the last 20 minutes of trading.

Many insurance stocks fell sharply after the Supreme Court upheld most of President Obama's health care law. The stocks of hospital operators rose. The ruling upheld the central provision of the law, a requirement that almost all Americans carry health insurance.

There were varying explanations for the late comeback on the stock market. European leaders were holding their first day of summit talks to address the region's sluggish economic growth and collapse of investor confidence in the finances of weak countries like Greece and Portugal.

There wasn't any concrete or official plan to emerge from the meeting, but rumors swirled that the European Central Bank could cut interest rates, and that European leaders were becoming more conciliatory, rather than just confrontational, as they worked on how to prop up troubled countries that are too big to bail out, like Spain and Italy.

Bank stocks erased much of their losses in late trading. JPMorgan cut its loss in half. The stock was down as much as $1.93 but ended with a loss of 90 cents at $35.88. It was still the biggest loss among the 30 stocks in the Dow average.

The New York Times reported that JPMorgan's loss from complex derivatives trades that went wrong could swell to $9 billion, much larger than the bank has acknowledged. The bank had said previously the loss was $2 billion but could get larger.

The Dow Jones industrial average ended down 24.75 points at 12,602.26.

Other indexes also cut their losses. The Standard & Poor's 500 index fell 2.91 points to end at 1,329.04 and the Nasdaq composite fell 25.83 points to 2,849.49. Both indexes had been down more earlier.

The dollar and Treasury prices rose as investors parked money in low-risk assets. The yield on the 10-year Treasury note fell to 1.59% from 1.63% late Wednesday. The dollar rose about a penny against the euro to $1.24.

There was little for investors to like in new reports on the U.S. economy.

The U.S. economy grew at an annual rate of just 1.9% in the January-March quarter, according to a new government estimate. Consumer spending, which accounts for a huge part of the economy, grew 2.5%, below the previous 2.7% estimate. The four-week average of applications for unemployment benefits didn't decline, a sign that layoffs aren't easing.

News Corp. fell 1% after the media conglomerate said it would separate its publishing and entertainment businesses into two public companies. The stock or Rupert Murdoch's sprawling media empire, which includes The Wall Street Journal, the Fox TV network, Fox News Channel and newspapers in Australia and Britain, gave up 32 cents to $21.99.

Family Dollar Stores fell $1.93 to $67.20 after the discount retailer of household goods and food reported earnings and revenue that were short of what Wall Street analysts were expecting.

Paychex dropped 95 cents to $30.98. The company, which provides payroll, human resources and benefits services to employers, reported revenue was shy of what analysts were expecting.

Rising stocks outnumbered falling ones three to two. Volume was average at 3.8 billion shares.

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The banks that borrowed the money is sitting on it, to make sure that they meet the Democrats bill that they passed in 2009 to make sure they keep enough funds in their bank vaults to cover any losses. Wall Street has hyped up all stocks, for all we know the unions have used the money given to them by the Obama and the Democrats are the buyers of all stocks being offered on Wall Street, because the rest of working stiffs with 401k plans lost alot of money in 2009 and 2008. Unless Warren Buffett and GE presidents (billionaires) are the buyers. You have to wonder who with the crisies in the world of economics who has that kind of money to risk.

July 19 2012 at 4:54 PM Report abuse rate up rate down Reply

Blow up Wallstreet.

June 28 2012 at 7:03 PM Report abuse rate up rate down Reply