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Stocks higher after Thursday sell-off

June 22, 2012|By Andrew Tangel
  • Stocks edged higher after Thursday's sharp sell-off.
Stocks edged higher after Thursday's sharp sell-off. (Spencer Platt/Getty Images )

Stocks bounced higher in the first trading since Moody's Investors Service slashed credit ratings of 15 major banks navigating Europe's economic turmoil.

A day after it dove 251 points on Thursday, the Dow Jones industrial average gained 58 points, or 0.5%, to 12,631 shortly after the opening bell on Wall Street.

The broader Standard & Poor's 500 index was up 6 points, or 0.4%, to 1,331. The Nasdaq was up 9 points, or 0.3%, to 2,868.

Investors had been expecting the downgrades for months. Morgan Stanley was docked two credit notches, less than anticipated, making it a "clear winner," analysts for Keefe, Bruyette & Woods wrote in a note.

Morgan Stanley's stock gained 16 cents, or 1.2%, to $14.12 a share in early trading.

The KBW analysts said the expectation of Moody's downgrades, along with the European financial crisis, had unsettled markets.

"Although a downgrade is not a positive, we are encouraged that the downgrades were in line or better than expectations and it appears that a headwind has been removed," the note said.

RELATED:

Stocks fall 2% on continuing fears of slowdown

Moody's downgrades credit ratings of giant global banks

Dow dives 251 points amid weak data, expected bank downgrades

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