Stocks recovered the lion’s share of a steep intraday loss to end nearly flat as some appetite for risk returned at the end of a session otherwise dominated by worries about Europe’s credit crisis and political tension between North and South Korea.
As late as 2 p.m. Eastern, the Dow Jones Industrial Average had a 200-point loss, flirting with its first finish below 10000 since early February. But the measure began a march higher to finish with a 22.81-point decline, off 0.2%, at 10043.75.
The Nasdaq Composite Index fell 0.1%. The S&P 500, which posted an across-the-board decline in every sector early in the session, ended with a 0.43-point gain, nearly flat on the day in percentage terms. The measure was bolstered at the close by a 1.6% gain in its basic materials category, along with smaller gains in telecommunications, financials, and the consumer-discretionary sector. Traditional safe-haven sectors like utilities, consumer staples, and health care were the chief laggards.
“The main thing that is dominating the market right now is the potential for government events of various types, and that sort of risk is very hard to measure,” said Peter Boockvar, managing director at Miller Tabak in New York. “As long as that’s the case, I think we’re going to continue to see big intraday swings like this.”
In particular, bank stocks drew strength in the afternoon from remarks by House Financial Services Committee Chairman Barney Frank (D., Mass.), who said the White House’s proposal to stop banks from certain risky trading practices would “very likely” be in the final financial overhaul. But he said a separate provision to force banks to spin off their derivatives businesses “goes too far.”
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