Wall St claws back after sharp decline, banks lead

MARKETS-USA-STOCKS-CLOSE:Wall St claws back after sharp decline, banks lead

new York  June 23, 2012, 3:51 IST

new York  06 23, 2012, 04:00 IST

 

U.S. stocks ended higher on Friday, led by gains in bank shares, as the S&P 500 index bounced back from its second-worst decline of the year.

The gains were not enough to push stocks into positive territory for the week, however.

Bank shares, among the worst hit on Thursday, rose after Moody's Investors Service announced credit downgrades for 15 of the world's largest banks. The downgrades had been expected, but some were less severe than feared, which helped boost those shares on Friday.

Dow component JPMorgan Chase & Co shares rose 1.4 percent to $35.99 following a 2.6 percent drop Thursday. The KBW Bank index <.BKX> gained 1.4 percent.

 

"It was such a hard selloff yesterday, a relentless selloff with a lot of downside volume at the close. Coming out of that, you usually get at least some kind of a rebound," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

"As for Moody's downgrade, it was pretty much expected. The focus continues to be Europe at this point."

Boosting market sentiment, leaders of Germany, France, Italy and Spain agreed on a 130 billion euros package to revive growth in the region.

The Dow Jones industrial average was up 67.21 points, or 0.53 percent, at 12,640.78. The Standard & Poor's 500 Index was up 9.51 points, or 0.72 percent, at 1,335.02. The Nasdaq Composite Index was up 33.33 points, or 1.17 percent, at 2,892.42.

The benchmark S&P index had slipped 2.2 percent on Thursday, its biggest drop since June 1, on signs of a global slowdown in manufacturing growth.

For the week, the Dow lost 0.9 percent and the S&P 500 fell 0.6 percent. But the Nasdaq was up 0.7 percent.

Facebook shares , which Russell named in its preliminary list of additions to the Russell 3000 index, have rallied more than 21 percent in the past two weeks. The shares were up 3.8 percent to $33.05 on Friday but were still off from the $38 initial public offering price.

Darden Restaurants Inc fell 0.7 percent to $50.04 after the operator of Olive Garden and Red Lobster restaurant chains reported sales that missed estimates and forecast weaker-than-expected profits.

Ryder Systems Inc slumped 13 percent to $35.44 after the transportation and logistics company cut its quarterly earnings forecast, citing lower demand at its commercial rental business.

Shares of Arena Pharmaceuticals Inc fell about 15.4 percent to $9.88 on Friday, ahead of a key meeting in which U.S. regulators are expected to rule on whether to approve its experimental weight-loss drug.

About 7.7 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, in line with last year's daily average of 7.84 billion.