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Stocks open higher; profits at banks provide boost

October 22, 2009|Associated Press

NEW YORK — The stock market began Wednesday with a rally but finished down for the day as worries mounted about banks and the price of oil.

The Dow Jones industrial average, which early in the day was up 78 points as it and other major stock indexes touched fresh 2009 highs, ended down 92 points.

The blue-chip index plunged about 130 points in the final hour of trading after an analyst's downbeat note about Wells Fargo intensified lingering concerns about the pace of the market's climb in the last seven months, traders said.

Investors "all ran for the exits at the same time," said Joe Saluzzi, co-head of equity trading at Themis Trading.

Also pushing stocks down was oil's leap above $80 a barrel and word that Wal-Mart Stores planned to slash prices on thousands of products in response to continuing weakness in consumer spending. Wal-Mart shares dropped 2.1%.

The Dow Jones industrial average fell 92.12 points, or 0.9%, at 9,949.36. The broader Standard & Poor's 500 index fell 9.66 points, or 0.9%, to 1,081.40. The Nasdaq composite index fell 12.74 points, or 0.6%, to 2,150.73.

Stocks spent much of the day higher after Wells Fargo, Morgan Stanley and US Bancorp posted improved results for the third quarter. But the firms also had higher loan losses, indicating that the broader economy is struggling even as the financial industry recovers.

Banks, which had been leading the market higher, mostly finished lower after the negative note about Wells Fargo. Its shares fell 5.1%.

But Morgan Stanley and US Bancorp remained in positive territory, closing up 4.8% and 2.7%, respectively.

Airlines slumped after AMR, Continental Airlines and UAL posted losses. AMR and UAL lost 12%, while Continental sank 13.8%.

Some technology names rose after Internet giant Yahoo and memory-card maker SanDisk late Tuesday reported profits that topped analyst expectations. Yahoo rose 2.9%, while SanDisk surged 9.5%.

Apple rose $6.16, or 3.1%, to a record close of $204.92, topping the $199.83 it closed at on Dec. 28, 2007. Treasury bond yields rose. The benchmark 10-year Treasury note climbed to 3.41% from 3.33% late Tuesday.

The dollar weakened against other major currencies. That helped oil futures rise $2.25 to $81.37 a barrel on the New York Mercantile Exchange. Overseas, key stocks rose 0.3% in Britain, 0.4% in Germany and 0.1% in France.

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