The Joplin Globe, Joplin, MO

Business

June 21, 2013

US stocks open higher after 2-day plunge

NEW YORK — U.S. stocks rose in morning trading on Friday as traders regrouped following the biggest drop of the year.

The Dow Jones industrial average was up 50 points, or 0.3 percent, to 14,809 after the first half-hour of trading Friday.

The Dow plunged 560 points Wednesday through Thursday after the Federal Reserve said it could wind down its bond-buying program by the middle of next year.

The Standard & Poor’s 500 index rose eight points, or 0.6 percent, to 1,597 points. Consumer staples, which fell sharply the day before, led the way higher.

The Nasdaq composite index edged down two points, or 0.1 percent, to 3,362.

The Nikkei index in Japan rose 1.7 percent, but other Asian markets fell. European markets were mixed but made only small moves.

The yield on the 10-year Treasury note edged up to 2.44 percent from 2.42 percent.

Among stocks making big moves:

— Oracle plunged $3.04, or 9 percent, to $30.17, the biggest drop in the S&P 500 index. The software maker’s quarterly results showed that it’s struggling to adapt as customers shift away from software installed on their own computers toward software that runs remotely.

— Darden Restaurants, which runs Olive Garden and Red Lobster, fell $1.16, or 2.3 percent, to $50.07 after rising expenses hurt its fourth-quarter earnings.

— CarMax, which runs used car dealerships, reported that its first-quarter profit jumped 21 percent as sales rose. Its stock rose 63 cents or 1.4 percent, to $45.20.

A Fed policy statement and comments from Chairman Ben Bernanke started the selling in stocks and bonds Wednesday.

Bernanke said the Fed expects to scale back its massive bond-buying program later this year and end it entirely by mid-2014 if the economy continues to improve. The bank has been buying $85 billion a month in Treasury and mortgage bonds, a program that has made borrowing cheap for consumers and businesses. It has also helped boost the stock market. The Dow reached an all-time high three weeks ago of 15,409.

After Bernanake’s comments, the index lost 560 points on Wednesday and Thursday, wiping out its gains from May and June. The Dow’s drop on Thursday was its biggest since November 2011.

Some investors said the sell-off in stocks may be overdone. The Fed is considering easing back on its stimulus because the economy is improving. The central bank has upgraded its outlook for unemployment and economic growth.

The S&P 500 is still up 11.9 percent, for the year, not far from its full-year increase of 13.4 percent last year.

 

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