U.S. Blue Chips Seek First Gain of Week
By KRISTINA PETERSON
NEW YORK—U.S. stocks rebounded following three days of losses, as bets that rebuilding efforts in Japan could lift energy and industrial companies offset anxieties around the country's nuclear power crisis.
After falling 3.6% in the week's first three days, the Dow Jones Industrial Average was up 118 points, or 1%, to 11731 in early afternoon trading.
The Nasdaq Composite gained 1.1% to 2645. The Standard & Poor's 500-share index added 1.1% to 1271, led by the energy, materials and industrial sectors.
The market's advances came in spite of deep worries over Japan's ability to contain the aftermath of last week's earthquake and tsunami. The Japanese government renewed efforts to tame the nuclear power plant at the center of Japan's nuclear crisis after suffering some delays Thursday, even as it waited for results of its attempt to cool pools of hot nuclear waste on the scene with seawater carried by helicopter.
Hopes that the authorities would be successful in helping to bring the radiation-leaking nuclear facility under control helped trim stocks' losses in Asia. Japan's Nikkei Stock Average, down as much as 5% at one point, ended 1.4% lower. In Europe, indexes largely gained on Thursday; the regional Stoxx Europe 600 rose 1.9% and Germany's DAX added 2.2%.
U.S. investors said the day's gains were unsurprising after the three-day slump.
"The market was due for a bit of a bounce, given how negative the sentiment got and how violent the downdraft was," said Carlton Neel, senior managing director at Virtus Investment Advisers. "What we're starting to see is the recognition that the rebuilding effort in Japan is going to take an enormous amount of resources: both human resources and natural resources."
Investors also noted that trading volume was light on Thursday. After four hours of trading, only 2.4 billion shares had traded hands in New York Stock Exchange Composite volume. Average daily volume this year is around 4.5 billion.
"The volume's kind of pitiful, so it's a select few that's buying," said Rob Russell, President of Russell & Co. "I don't think there's any significant optimism by any stretch. I think the average investors are staying out of it for now."
Energy companies gained as crude-oil prices climbed back above $101 a barrel. Oilfield services company Schlumberger rose 4.8%, while drilling contractor Rowan gained 4.6% and oil and gas exploration and production company Noble Energy added 4.7%.
Industrials climbed, also lifted by a 3.7% jump in international package shipper FedEx after its fourth-quarter earnings target topped analysts' mean estimate. Its company's fiscal third-quarter profit slid, hurt by winter storms. Rival United Parcel Service rose 1.6%.
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.The yen pulled back from a record high against the dollar, set early in the Asian day, as markets braced for potential intervention by the Japanese government to force the yen lower. The dollar had plummeted versus the yen shortly after the U.S. market's close on Wednesday amid talk that Japanese companies and individuals were buying yen to bring money home in wake of the earthquake. Japanese officials claimed the overnight jump in the yen was driven by speculators.
The dollar recently traded at 79.05 yen, down from 79.85 yen late Wednesday in New York. It hit 76.25 yen in early Asian trade. Group of Seven ministers will hold a conference call later Thursday on ways to calm global markets, Japanese Finance Minister Yoshihiko Noda said.
The dollar also weakened against the euro, which touched its highest level against the dollar since Nov. 8. The euro was trading recently at $1.4011, up from $1.3896 late Wednesday in New York. The U.S. Dollar Index, which tracks the currency against a basket of others, fell 0.9%.
U.S. economic data was mixed on Thursday. Encouraging investors, the Philadelphia Federal Reserve's manufacturing survey for March showed its best reading since January 1984, well outstripping expectations.
The government's weekly report on the number of U.S. workers filing new claims for unemployment showed a bigger-than-expected drop last week. Meanwhile, U.S. consumer prices rose in February at their fastest pace since mid-2009 as energy and food prices continued to move higher.
Among stocks in focus, Winnebago skidded 13% after the recreational-vehicle sounded a note of caution on fuel price volatility related to violence in the Middle East, as well as commodity costs. The company also posted lower revenues.
Guess plunged 12% after the apparel maker's comparable sales at its larger U.S. retail business declined, and it gave a weak outlook for earnings this year and for the current quarter's results. Fiscal fourth-quarter earnings rose 19% on continued strength overseas.
Apple gained 2.3% after Credit Suisse started coverage of the stock with an "outperform" investment rating, setting a $500 price target on predictions of strong earnings growth.
Demand for U.S. Treasurys slipped, pushing yield on the 10-year note up to 3.25%. Gold futures climbed.
Write to Kristina Peterson at
kristina.peterson@dowjones.com