Posted: Tuesday, March 4th 2014 at 10:58am
Stocks surge as tensions ease in Ukraine; Dow up 197 in early trading
By The Associated Press
Relieved investors sent stocks sharply higher Tuesday after Russia pulled troops back from the border of Ukraine. The rally erased steep losses from Monday caused by fears an escalating conflict.
KEEPING SCORE: The S&P 500 index was up 23 points, or 1.3 percent, at 1,869 in the first hour of trading.
The Dow Jones industrial average rose 197 points, or 1.2 percent, to 16,365. The Nasdaq composite rose 67 points, or 1.6 percent, to 4,344. Almost 10 stocks rose for every one that fell on the New York Stock Exchange.
RELIEF RALLY: The volatility comes after the S&P 500 closed at a record high on Friday. That has left investors trying to figure out whether stocks are overvalued or whether they reflect an improving economy. Monday's "swift negative reaction" to the situation in Ukraine reinforces "our concerns that the U.S. stock market is vulnerable to increased volatility this year after the substantial stock advance over the past year and a half," Wells Fargo Advisors strategist Gary Thayer wrote after Monday's sell-off. The S&P 500 had its biggest decline in a month on Monday.
GOING FOR RISK: Bond and gold prices fell as traders moved money out of safe-play assets. Oil prices also fell as the immediate threat of economic sanctions on Russia, a major oil exporter, eased. The yield on the 10-year Treasury note rose to 2.66 percent from 2.60 percent late Monday.
WORLD MARKETS: Stock markets in Europe, including in Moscow and Asia, recouped much of Monday's losses. Indexes in France and Germany each rose more than 2.3 percent, and the FTSE 100 in Britain rose 1.6 percent.
THE SHACK PARES BACK: RadioShack Corp. plunged 51 cents, or 19 percent, to $2.21 after reporting a wider quarterly loss. The company also said it would close up to 1,100 stores.
BUYBACK BOUNCE: Chipmaker Qualcomm rose $2.51, or 3.4 percent, to $76.14 after announcing a 20 percent increase in its quarterly dividend and adding $5 billion to its stock buyback program. Buybacks generally benefit shareholders because they increase the value of remaining shares.
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