Blue-chip stocks rallied Friday, extending their furious, final-hour recovery from Thursday’s wrenching slide, as investors continued to hunt for bargains in the market’s meltdown.
The Dow Jones industrial average gained 115.30 points, or 1.2 percent, to 9504.78, only the second Friday gain this year. For many experts, it was an encouraging finish, especially given the Dow’s dip into bear-market territory Thursday, when it slid nearly 400 points before bouncing back.
“It’s the best action we’ve had in a while,” said Al Goldman, chief market strategist at A.G. Edwards & Sons. “The market had a difficult week, but today’s trading will make the weekend more enjoyable.”
Still, no one can be sure if the rebound is a sign of things to come or a momentary respite. Investor angst over the soft U.S. economy and weak corporate earnings has not diminished.
And next week has the potential for more turmoil: With corporate earnings warnings likely to slow as the quarter nears its close and actual results several days away, the few pieces of economic data due out may take on added importance. On Monday, home sales for February will be reported, followed by March’s consumer confidence index on Tuesday.
“We will be looking very closely at these numbers for clues of the slowdown spreading from manufacturing to other areas of the economy,” said Brian Wesbury, chief economist at Griffin, Kubik, Stephens & Thompson, a Chicago investment banking firm.
Stocks managed to gain Friday in the absence of major corporate or economic news to move the market. The rally was broader than Thursday’s, when technology stocks unexpectedly came to the rescue.
Financial stocks were some of the biggest winners: Citigroup climbed $2.25, or 5.5 percent, to $48.25; J.P. Morgan Chase added $2.80, or 7.2 percent, to $41.71; and Chicago-based Bank One rose $1.09, or 3.2 percent, to $34.58. Dow component General Electric jumped $2.29, or 6.1 percent, to $39.99.
Tech stocks continued to climb, with International Business Machines up $4.41, to $93.51; Microsoft adding $2.56, to $56.56; and Dell Computer up $1.19, to $27.44.
Locally, Vernon Hills-based CDW Computer Centers jumped nearly 15 percent, to $38, and Chicago-based Focal Communications rose almost 11 percent, to $8.87, though shares remain far below their 52-week high of $85.
The tech-heavy Nasdaq composite index gained 30.98 points, or 1.6 percent, to 1928.68, giving it a gain for the week of 37.70, its first positive week since late January. The Dow, however, for the week lost 318.63 points, or 3.2 percent, bringing its two-week loss to 1139 points.
While the positive session was encouraging, analysts said it was too early to tell if stocks will make a concerted move upward. Investors are still shell-shocked over the sharp decline in the Dow the past two weeks. Blue-chip stocks had been resilient to the massive sell-offs that devastated the Nasdaq over the past several months.
“I don’t know if this is actually a turn in the market,” said Philip Dow, director of equity strategy at investment banking and brokerage firm Dain Rauscher Wessels. “But maybe things aren’t going to deteriorate any more.”
