Trader Robert Cullinan works on the floor of the New York Stock Exchange, yesterday. Stocks fluctuated in early trading following a sharp pullback on Friday brought by concerns about the credit market and ahead of the Federal Reserve's meeting today. - Reuters NEW YORK (Reuters):
STOCKS CLIMBED yesterday as the worry that wracked Wall Street last week was soothed after central banks injected more cash into global financial systems and a report showed United States (U.S.) retail sales grew last month.
The stock market bounced back from several sharp declines last week on worsening lending conditions worldwide, sparked by the U.S. subprime mortgage mess.
Shares of investment bank Goldman Sachs Group Inc. rose after the investment bank said it and outside investors would pour US$3 billion of new capital into Goldman's Global Equity Opportunities hedge fund, which had been hurt by recent volatility.
Retail sales rose more than expected in July, the Commerce Department said, which also revised June's figures upward to show a smaller drop.
Mortgage sector trouble
"Once again, you keep hearing the consumer is going to collapse. Our argument in this kind of employment market, where you have unemployment this low, you're going to see people out there spending money," said Scott Wren, senior equity strategist at A.G. Edwards and Sons Inc. in St. Louis.
The Dow Jones industrial average was up 76.74 points, or 0.58 per cent, at 13,316.28. The Standard and Poor's 500 Index was up 10.87 points, or 0.75 per cent, at 1,464.51. The Nasdaq Composite Index was up 25.73 points, or 1.01 per cent, at 2,570.62. Goldman rose 1.3 per cent to US$183.03.
Despite the improved mood on Wall Street, signs of trouble in the mortgage sector remained.
Accredited Home Lenders Holding Co. said yesterday it had sued private equity firm Lone Star Funds, seeking to force it to complete the US$400 million takeover of the money-losing subprime mortgage lender.
Accredited Home Lenders Holding Co. said yesterday it had sued private equity firm Lone Star Funds, seeking to force it to complete the US$400 million takeover of the money-losing subprime mortgage lender.
Shares of Accredited tumbled 33.8 per cent to US$5.90. Shares of Blackstone Group rose after the private equity firm reported a near tripling of its quarterly net income. Blackstone's shares rose seven per cent to US$27.05 on the New York Stock Exchange.
