Friday, October 7, 2011

Wall Street fends off bear to end higher for week

After nearly falling into bear-market territory, US stocks finished the week higher, building gains on encouraging jobs data and hopes that Europe is dealing with its debt crisis.

Wall Street's wild week began with cascading losses that brought stocks to their worst levels in 13 months. After rebounding Tuesday, the S&P 500 rose about 5 percent from its worst levels as short-sellers rushed to cover losses on new optimism about Europe. The benchmark index ended with gains of 2.1 percent for the week.

The Dow Jones industrial average was down 20.21 points, or 0.18 percent, at 11,103.12. The Standard & Poor's 500 Index was down 9.51 points, or 0.82 percent, at 1,155.46. The Nasdaq Composite Index was down 27.47 points, or 1.10 percent, at 2,479.35.

European shares rose to a five-week closing high, after better-than-expected US nonfarm payroll data eased worries that the world's largest economy was slowing down and boosted optimism about global growth.

Cyclical stocks such as carmakers and miners were among the strongest gainers on hopes that better economic growth would boost demand for these sectors.

The pan-European FTSEurofirst 300 index of top shares closed up 0.7 percent at 947.63 points -- its highest close since Sept. 2 -- and ended the week 2.6 percent higher.

The Nikkei stock average climbed today for a second day, cutting its losses for the week to just over 1 percent as hedge funds tip-toed back into the market, betting that an easing of fears over Europe's banking sector would sustain the short-term bounce.

Caution ahead of US payrolls data later in the day kept volumes light as the previous session's short covering-led gains spilt over into today, on hopes that a plan to support Europe's financial sector was making progress.

The Nikkei closed up 1 percent at 8,605.62, although it fell 1.1 percent for the week. The broader Topix , which earlier this week briefly broke below its post-quake low, ended 0.6 percent higher on the day but down 2.6 percent for the week.