Wall Street rebounds in final hour of trades
Investors scooped up undervalued stocks in the final hour of trading.
NEW YORK (AP) — Wall Street rebounded Tuesday in another turbulent session, as investors rushed back into the market after the Standard & Poor’s 500 index tested a 2003 low.
The market, which had been down four of the past five sessions, has been volatile amid worries about how long a recession might be. That’s driven many retail investors to the sidelines, while big institutional traders such as hedge funds keep major stock indexes vacillating.
That was the case Tuesday as stocks rallied in the final hour of trading. At least some of the buying was because fund managers whose portfolios are tied to the S&P 500 had to find a replacement for Anheuser-Busch Cos. The brewer was officially removed from trading at the market’s close after its takeover by Belgium’s InBev SA was completed.
Investors also used the market’s big drop earlier in the session as a chance to scoop up undervalued stocks. There was some encouragement about corporate earnings after Hewlett-Packard Co. said fourth quarter and 2009 results will sail past Wall Street expectations.
But still underpinning the market were concerns that the economy has fallen into a recession that could be the worst downturn in more than two decades. A disappointing reading on wholesale prices and the housing market only confirmed this.
The Labor Department reported that wholesale prices plunged a record amount in October, a drop that could indicate a rising threat of deflation. Meanwhile, home builders’ confidence in a near-term housing recovery sank to a new all-time low this month, according to the National Association of Home Builders/Wells Fargo housing market index. NAHB Chairman Sandy Dunn said the report “shows that we are in a crisis situation.”