New York – U.S. stocks surged Friday, with the Dow adding more than 200 points, after the Federal Reserve’s unexpected intervention, yet still ended with weekly losses.
“This morning’s move by the Fed is largely symbolic and suggests the Fed is willing to act in the event conditions in the financial markets deteriorate further, but we’re far from being out of the woods,” said Mike Malone, trading analyst at Cowen & Co.
The Dow Jones industrial average ended up 233.3 points, or 1.82 percent, to 13,079.1, giving it a weekly loss of 1.2 percent. Of the Dow’s 30 stocks, 25 closed ahead, led by Exxon Mobil Corp., which was up 4.3 percent amid a rise in the price of oil.
Bank stocks, hit hard by the relentless credit-market upheaval, were also among the Dow’s larger gainers, with JPMorgan Chase Co. ahead 3.4 percent and Citicorp Inc. up 2.7 percent.
DuPont & Co. Inc. was among the few Dow stocks losing ground, with its stock off 1.4 percent. General Motors Corp. and McDonald’s Corp. also edged lower.
The S&P 500 index was up 34.67 points, or 2.5 percent, at 1,445.94, with the S&P losing 0.5 percent for the week.
The Nasdaq Composite climbed 53.96 points, or 2.2 percent, to 2,505.03, with the Nasdaq falling 1.5 percent for the week.
Volume at the New York Stock Exchange topped 2.5 billion shares, with advancing stocks beating decliners 3-to-1. At the Nasdaq, 2.6 billion shares were exchanged, with gainers beating decliners, also by 3-to-1.
Shares of embattled Countrywide Financial Corp. climbed 13.1 percent after the nation’s largest mortgage lender was upgraded to neutral from sell by Banc of America Securities.
Hewlett-Packard Co. advanced 2.4 percent after the tech giant posted a 29 percent jump in third-quarter profits.
Shares of Nordstrom Inc. gained 1.9 percent after trading lower for much of the day after noting in its second-quarter results that it had upped its reserve on bad credit by about $22 million from a year earlier.
Ahead of the opening, the Federal Reserve said it had cut the discount rate by half a percentage point, to 5.75 percent, while acknowledging the precarious state of credit markets in making the move.
“The Fed move was to bolster confidence; it’s to kick-start trading in the stock market and has no meaningful mechanical action on the commercial-paper market,” said Michael Englund, principal director and chief economist for Action Economics LLC.
“The decision by the Fed is an important one, and very positive, but significant risks still exist,” said Malone.
Crude-oil and other energy futures rallied Friday, boosted by concerns that Hurricane Dean might hinder oil production in the Gulf of Mexico. Crude for September delivery rose 98 cents to close at $71.98 a barrel on the New York Mercantile Exchange.
