US stocks reverse losses

Stocks staged a dramatic turnaround after word that a bailout plan for a troubled bond insurer could be announced.

money good 88 (photo credit: )
money good 88
(photo credit: )
SHARES WALL STREET Stocks staged a dramatic turnaround Friday, shooting higher in the last half-hour of trading after word that a bailout plan for troubled bond insurer Ambac Financial could be announced this week. CNBC reported shortly before the closing bell that a plan to help shore up the finances of Ambac Financial Group Inc. could be announced on Monday or Tuesday. Ambac shares jumped on the report and finished up $1.48, or 16 percent, at $10.71. The market's turnaround came after nearly two days selling. The Dow Jones industrial average had been down more than 100 points, but by the close, showed a 225-point reversal from its lows of the session. The Dow rose 96.72, or 0.79%, to 12,381.02. Broader stock indicators also moved higher. The Standard & Poor's 500 index rose 10.58, or 0.79%, to 1,353.11, and the Nasdaq composite index rose 3.57, or 0.16%, to 2,303.35. The market's early decline followed a sell-off Thursday that left the Dow down more than 140 points, or 1.15%. Investors worried about a weaker-than-expected reading on regional manufacturing from the Federal Reserve Bank of Philadelphia as well as another drop in the Conference Board's monthly index of leading economic indicators. The Fed's next rate-setting meeting is scheduled for March 18. Policy-makers lowered key interest rates a half-point to 3% on January 30, following an emergency three-quarter point cut the previous week. EUROPE Markets reversed earlier gains to close markedly lower Friday as weakness at Germany's second-largest utility, RWE, and in the autos sector offset pockets of strength in the food and banking sectors. The pan-European Dow Jones Stoxx 600 index fell 0.8% to 319.88, with the auto and utility sectors topping the list of decliners. Shares of RWE lost 5.7% in Germany after it reported lower-than-expected annual results and issued a conservative outlook. It also unveiled plans to step up its capital expenditure and plans to invest 30 billion euros in new plants and equipment over the next five years. The weak results and outlook quickly spread to peers, sending E.On shares down 2.2%. In Paris, Suez shares lost almost 2.1%. Shares of British Airways fell 3.9%, while Ryanair shares lost 2.7% and Air France-KLM shares dipped 1.8%. Many banks were also making gains, helped by strength in shares of Lloyds TSB. Shares in the UK lender rose 4.8% after it reassured investors with a 17% rise in net profit, beating market expectations even as it increased write-downs for the year to $545 million. The UK FTSE 100 index closed down 0.7% to 5,888.50 and the French CAC-40 index lost 0.7% to 4,824.55, while the German DAX 30 index slumped 1.4% to 6,806.29. ASIA Markets fell amid persistent worries about slowdowns in the American and global economies after an overnight decline on Wall Street. In Hong Kong, the Hang Seng Index fell 317.96 points, or 1.4%, to 23,305.04. In Tokyo, the Nikkei 225 fell 187.82 points, or 1.37%, to 13,500.46, dragged down by real estate companies. CURRENCY The dollar slipped against the major currencies Friday, trading in a tight range on a day without significant economic reports. The euro edged up to $1.4825 from $1.4815 in New York late Thursday. The pound rose to $1.9687 from $1.9615, and the dollar fell to 106.93 Japanese yen from 107.38 yen, but rose to 1.0154 Canadian dollars from 1.0113 Canadian dollars. COMMODITIES Soybean futures continued their upward climb Friday, hitting a new record as investors bet that dwindling stockpiles coupled with growing demand in China will keep prices high. Wheat also rose. Other commodities traded mostly higher, with heating oil futures rising amid a snowstorm in the Northeast and silver reaching its highest level since 1980. Soybeans for May delivery jumped 13.5 cents to settle at $14.3825 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $14.40 a bushel. Heating oil for March delivery jumped 2.49 cents to settle at $2.763 a gallon, after earlier rising to a contract-high of $2.7860 a gallon. Other energy futures traded mixed. Light, sweet crude for April delivery rose 58 cents to settle at $98.81 a barrel on the Nymex on concerns about potential supply disruptions and cold weather. Meanwhile, March gasoline futures rose 1.17 cents to settle at $2.5337 a gallon. In precious metals, gold for April delivery fell $1.40 to settle at $947.80 an ounce on the Nymex.