The stock market rose for the first time in six days Wednesday, but the gains were muted and did little to dispel the notion that a deeper selloff may be underway.
The Dow Jones industrial average climbed 89.46 points, or 0.7%, to 12,805.39, a welcome reversal from its nearly 500-point decline over the previous five days. The Standard & Poor’s 500 index rose 0.7%, and the Nasdaq composite index was up 0.8%.
An unexpected first-quarter profit from Alcoa Inc. late Tuesday and a slight drop in yields on Spanish and Italian government debt lured buyers. Also, investors may have been assuaged by the Federal Reserve’s “beige book,” which said the economy is growing at “a modest to moderate pace” despite rising gas prices.
But investors appear unconvinced that a rally will take hold, and many are instead bracing for a larger drop in share prices. After a six-month surge driven by upbeat economic data, concern is growing once again about the European debt crisis and the staying power of the U.S. recovery.