US stocks rose yesterday as investors latched onto positive news out of Europe in the latest in a string of low-volume sessions suggesting little confidence in market direction.
Bank stocks recovered from Tuesday’s losses, with JPMorgan up 2.2 per cent and the BKW bank index up 1.7 per cent. A successful Portuguese debt offering as well as news that nationalised Irish lender Anglo Irish would wind down assets pulled global equity markets higher.
After last week’s sharp bounce in equity markets halted the August sell-off, the S&P is nearing the top of its recent trading range. Low volume suggests investors aren’t entirely convinced the market can move substantially higher.
“Overall we’re still locked in a fairly narrow trading range, and that’s consistent with the jerky pattern of how the economy here and in developing worlds is unfolding,” said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.
The Fed’s Beige Book compilation of anecdotal reports confirmed the economy had begun to slow over the summer, a fact that had sent stocks sharply lower in August but that had little impact on yesterday’s session.
The Dow Jones industrial average rose 46.32 points, or 0.45 per cent, at 10,387.01. The Standard & Poor’s 500 Index added 7.03 points, or 0.64 per cent, at 1,098.87. The Nasdaq Composite Index climbed 19.98 points, or 0.90 per cent, at 2,228.87.
On Tuesday, stocks fell in light volume as investors seized on renewed concerns about European banks’ exposure to sovereign debt to sell shares after strong gains last week when the S&P 500 jumped more than five per cent in three days.
This week has been shortened by the Labour Day holiday on Monday, while the Rosh Hashanah Jewish new year holiday could mean staffing and trading volume are reduced on Thursday and Friday, providing the potential for more volatility.
US-traded shares of BP rose 3.2 per cent at $38.37 after the firm issued an internal report on the rig explosion that led to the worst US oil spill ever and the death of 11 crew members.
Transocean gained 1.3 per cent to $53.74, while Halliburton added 1.2 per cent to $30.21.
Staples was up 2 per cent to $19.04, and Costco Wholesale Corp rose 1 per cent to $59.21 after Goldman Sachs upgraded their stocks.
About 6.55bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq , far below last year’s estimated daily average of 9.65bn.