Indices reverse losses but Fed fears remain – New York Report
A PAUSE in the oil price slide yesterday helped Wall Street to reverse early losses. However, continued concerns about the high-yield debt market and a rate hike this week played on investors’ minds.
The Dow Jones industrial average picked up 103.29 points, or 0.6 per cent, to 17,358.50. The S&P 500 index gained 9.57 points, or 0.5 per cent, to 2,021.94, while the Nasdaq composite index added 18.76 points, or 0.4 per cent, to 4,952.23.
Although stocks closed higher, equity investors are still concerned about the high-yield bond market. Third Avenue Management LLC’s junk bond fund collapsed last week and the company said yesterday its chief executive agreed to leave.
Concerns about high-yield bonds, oil price swings and the Fed made for a skittish market, said Peter Costa, president of Empire Executions. “It’s a lot of uncertainty,” he said.
“It’s just the fear of the unknown,” said Angel Mata, managing director of listed equity trading, Stifel Capital Markets in Baltimore. “2008 – though it was seven years ago – is still fresh in everybody’s mind and the fear is we could have a kind of situation that we had back then, which was driven by the fixed-income side.”
S&P materials were the only sector to show losses, down 1.4 per cent, hurt by Dow Chemical and DuPont, which agreed on Friday to merge. DuPont shares were down 3.6 per cent, while Dow Chemical fell 3.9 per cent.
Newell Rubbermaid was down 6.9 per cent at $42.15. Newell, known for its food containers, agreed to buy Sunbeam and Coleman products maker Jarden Corp for more than $15bn. Jarden was up 2.7 per cent at $54.09.