Stocks try to stabilize but finish near day lows
EmptyNEW YORK -- Wall Street seesawed through an erratic session Monday, trying to stabilize but ultimately finishing near its lows of the day amid worries about mortgage defaults, a strengthening yen and tumbling stock markets abroad.
The major indexes fluctuated throughout the day, with the Dow Jones industrials bobbing between positive and negative territory as investors tried to size up where the market was headed after last week's big decline. The Dow finished 63 points lower, having fallen eight of the last nine sessions.
The market remained jittery about about losses over soured subprime loans, or loans to customers with poor credit ratings, as HSBC Holdings PLC, Europe's largest bank, said its 2006 earnings rose 5% but that it suffered $10.6 billion on losses on bad loans from its U.S. subprime mortgage operations.
Also pushing stocks down, a rising yen added to concerns over an erosion of the yen carry trade, which is the process of borrowing the low-yielding yen to acquire assets in other currencies with greater yields. A slowdown could hurt liquidity worldwide. By early afternoon, the U.S. dollar was below 116 yen, trading near three-month lows after falling from above 120 yen less than a week ago.
Though the markets were uneasy Monday, they were hardly out of control as the Dow traded within a 150-point range and stayed above the 12,000 mark, which it had surpassed for the first time in October last year.
According to preliminary calculations, the Dow fell 63.69, or 0.53%, to 12,050.41, having swung 75 points lower and 75 higher than Friday's close in earlier trading.
Broader stock indicators also fell. The Standard & Poor's 500 index was down 13.06, or 0.94%, at 1,374.11, and the Nasdaq composite index -- which is dominated by riskier technology and small-cap stocks -- fell 27.32, or 1.15%, to 2,340.68.
Bond prices fell, with the yield on the benchmark 10-year Treasury note at 4.51%, up from 4.50% late Friday. The dollar was higher against other major currencies except for the yen. Gold, though traditionally a safe-haven investment, continued to slide.
Oil prices dropped sharply, but lifted from earlier lows below $60 a barrel to finish down $1.57 at $60.07 on the New York Mercentile Exchange.