Stocks fluctuated Friday, giving up early gains as investors appeared to take a break from the run-up in stocks this week.Investors’ early burst of enthusiasm, which sent each of the major indexes up more than 1 percent, came after upbeat profit reports from big names like Microsoft Corp. and reports of a possible buyout of a trouble bond insurer.But rumors of financial troubles among hedge funds appeared to unnerve the market Friday. The notion that a hedge fund could face trouble rekindled concerns that the recent stumbles in the financial sector may not be entirely on the mend; reports of fund problems have contributed to the market’s declines over the past few months.The concerns about further turmoil in the financial sector dampened the market’s enthusiasm over Microsoft’s bright forecast and earnings that outpaced expectations. The results for a time had appeared to strengthen a notion emerging in recent days that perhaps Wall Street had been too pessimistic in its reading of the economy.”There are a number of names of hedge funds being bandied about as possibly being in trouble,” said Tom di Galoma, head of Treasurys trading at Jefferies %26 Co. It is impossible to discern whether the stories have any basis in fact, he said.The day’s volatility wasn’t surprising, particularly as investors readied for the weekend and following two days of gains that heading into Friday’s session left the Dow Jones industrial average up by more than 275 points, or 2.3 percent, for the week.Scott Fullman, director of investment strategy for I. A. Englander %26 Co., noted the market has had a lot to consider in recent days and a retrenchment or move sideways on a Friday wasn’t unexpected.”The market is extremely sensitive to any news that’s out there. A year ago, it brushed off a lot of stuff. Now, it’s just the opposite, and we’re seeing reactions nearly immediately when things come out,” he said.Fullman added that oil’s climb back above $90 a barrel probably has some traders concerned.”People may be looking to take some profits off the table in this volatile market. And there’s a lot of activity that’s coming up next week,” Fullman said.President Bush is scheduled to deliver his State of the Union address Monday. Meanwhile, the Federal Reserve is expected to hold its first regularly scheduled meeting of the year on Tuesday and Wednesday, and then the Labor Department plans to weigh in on the state of the job market on Friday.In late morning trading, the Dow rose 10.81, or 0.09 percent, to 12,389.42. The Dow had been up more than 100 points in early trading.Broader stock indicators showed modest gains. The Standard %26 Poor’s 500 index rose 1.35, or 0.10 percent, to 1,353.42. The technology-heavy Nasdaq composite index rose 7.49, or 0.32 percent, to 2,368.41.Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its yield, fell to 3.65 percent from 3.71 percent late Thursday.Wall Street still found room for optimism in part because of reports from U.K. newspapers that billionaire Wilbur Ross was in talks to acquire bond insurer Ambac Financial Group Inc. Financial woes at many U.S. bond insurers have in recent weeks caused headaches for investors worldwide who have worried that the credit crisis could worsen should one of the companies buckle under an inability to draw new business.Word of Ross’ interest follows comments this week by New York State regulators saying they would consider lending support to shore up the struggling bond insurance industry. While uncertainty surrounds what role regulators might play, the comments helped reassure Wall Street and made room for stocks to rally in recent days.The dollar was mixed against other major currencies, while gold prices rose.Light, sweet crude oil rose $1.37 to $90.78 per barrel on the New York Mercantile Exchange.The sock market’s move follow comments from former Fed Chairman Alan Greenspan who told the Financial Times he isn’t certain the U.S. will tip into recession even though the economy might not be growing.Corporate news appeared to offer investors mixed readings on the economy.Microsoft rose 25 cents to $33.50 after topping Wall Street’s expectations. The company raised its forecast for the rest of its fiscal year, which ends in June, and said its quarterly earnings jumped 79 percent to $4.71 billion, or 50 cents per share.Ambac rose 51 cents, or 4.5 percent, to $11.84 amid the speculation the company could be sold. Ross was not immediately available to comment and calls to Ambac by The Associated Press were not immediately returned.Diversified manufacturer Honeywell International Inc. late Thursday reported fourth-quarter sales growth that handily topped Wall Street’s expectations. The company forecast weaker global economic conditions for the year but said it still expects to report double-digit growth in per-share earnings. The stock rose $2.93, or 5.2 percent, to $59.13.Caterpillar Inc. which like Honeywell and Microsoft is one of the 30 companies that make up the Dow industrials, warned it sees “anemic growth” in the U.S. economy but also predicts “positive conditions” for its sales in most other markets. The maker of construction equipment rose $1.21 to $66.46, after reporting its fourth-quarter earnings rose 11 percent amid strong international growth.The Russell 2000 index of smaller companies rose 5.87, or 0.85 percent, to 698.59.In afternoon trading Britain’s FTSE 100 rose 1.17 percent, Germany’s DAX index rose 2.20 percent, and France’s CAC-40 rose 1.34 percent.Earlier, Japan’s Nikkei stock average jumped 4.10 percent after falling sharply earlier in the week. Hong Kong’s Hang Seng index likewise surged 6.73 percent by the close.___On the Net:New York Stock Exchange: http://www.nyse.comNasdaq Stock Market: http://www.nasdaq.comCopyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Tags: ambac financial, amp, Business, credit crisis, dow jones, dow jones industrial average, economy, gold, insurance, insurance industry, insurer, labor department, microsoft corp, nasdaq stock market, New Business, nyse, recession, regul, rv, smaller companies, sti, t corp, uncertainty, volatilityJan 25
