Tuesday, October 4, 2011

Wall Street ends up after brush with bear market

US stocks slid into bear market territory on Tuesday, and prices of US crude oil fell to a one-year low, driven by fears of another global recession as Greece appeared increasingly likely to default.

The S&P 500 Index, a broad measure of the U.S. stock market, was down more than 20 percent from its 2011 high, marking a bear market threshold that, for many investors, is a sign stock losses may be sustained.

Based on the latest available data, the Dow Jones industrial average was up 151.52 points, or 1.42 percent, at 10,806.82. The Standard & Poor's 500 Index was up 24.52 points, or 2.23 percent, at 1,123.75. The Nasdaq Composite Index was up 68.99 points, or 2.95 percent, at 2,404.82.

European shares fell sharply to flirt with a 26-month closing low after European officials discussed making banks take bigger losses on Greek debt and delayed a key aid payment to Athens, with concerns growing that Greece could default.

Dexia plunged as much as 38 percent to record lows at one point on concerns about the Franco-Belgian financial group's high exposure to Greece. Its shares ended 22.5 percent lower in heavy volumes, even though France and Belgium promised to support it via guarantees.

The FTSEurofirst 300 index of top European shares ended 2.7 percent lower at 887.77 points after falling as much as 4 percent to a one-week low earlier in the day. The index hit a 26-month closing low in late September and is down nearly 21 percent so far this year.

The Nikkei stock average fell, but closed off its intra-day lows, as foreign investors continued to pull back from large-cap names with financials and commodity trading houses among the weakest performers on the day.

The Nikkei fell 1.1 percent to 8,456.12, after falling as low as 8,359.24. It remained above its intraday low of 8,227 set on March 15 in the wake of the March 11 earthquake.