New York – Wall Street seesawed through an erratic session Monday, trying to stabilize but ultimately finishing near its lows of the day amid worries about mortgage defaults, a strengthening yen and tumbling stock markets abroad.
The major indexes fluctuated throughout the session, with the Dow Jones industrials bobbing between positive and negative territory as investors tried to size up where the market was headed after last week’s big decline. The Dow finished 63 points lower, having fallen in eight of the past nine sessions.
The market remained jittery about losses over soured subprime loans, or loans to customers with poor credit ratings. HSBC Holdings PLC, Europe’s largest bank, said its 2006 earnings rose 5 percent but that it suffered $10.6 billion in losses on bad loans from its U.S. subprime mortgage operations.
Also pushing stocks down, a rising yen added to concerns about an erosion of the yen carry trade, which is the process of borrowing the low-yielding yen to acquire assets in other currencies with greater yields.
Though the markets were uneasy Monday, they were hardly out of control as the Dow traded within a 150-point range and stayed above the 12,000 mark, which it had surpassed for the first time in October.
“Stability is a good sign,” said Todd Salamone, senior vice president of research at Schaeffer’s Investment Research in Cincinnati.
The Dow fell 63.69, or 0.53 percent, to 12,050.41. The blue chips have fallen 581 points, or 4.6 percent, from their closing price Feb. 26, the day before the market’s plunge.
Broader stock indicators also fell. The Standard & Poor’s 500 index slipped 13.05, or 0.94 percent, at 1,374.12, and the Nasdaq composite index – which is dominated by riskier technology and smallcap stocks – dropped 27.32, or 1.15 percent, to 2,340.68.
The market saw the bulk of its drop right before the close, in a similar pattern to Friday, when the Dow flirted with gains only to drop 120 points late in the day.
Philip Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis, noted Monday that little has changed in terms of economic fundamentals but that the market is very volatile.
Asian and European stocks closed lower, keeping U.S. investors on edge.
The Nikkei fell for the fifth straight session to close down 3.3 percent, Hong Kong’s Hang Seng index fell 4 percent and the Shanghai Composite Index fell 1.6 percent.
