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London blasts help dollar and stock gains Original Source Link: (May no longer be active)
http://www.businessweek.com/ap/financialnews/D8B6NUTG0.htm?campaign_id=apn_home_downhttp://www.businessweek.com/ap/financialnews/D8B6NUTG0.htm?campaign_id=apn_home_down
The Associated Press/NEW YORK
By MICHAEL J. MARTINEZ
AP Business Writer
Stocks edge higher after London explosions
JUL. 7 3:16 P.M. ET Stocks edged higher Thursday after the terrorist attacks that rocked London and killed at least 40 people and injured more than 700. The Dow Jones industrials and Nasdaq composite index were both up slightly for the session after losing nearly 1 percent in early trading.
Investors took heart after the homeland security secretary said there was no "specific credible evidence" of a pending attack in the United States. A sharp drop in oil prices also helped the markets rally.
Traders said the timing of the London attacks, several hours before the start of trading in New York, allowed investors to overcome any knee-jerk reactions to the news. Jay Suskind, head trader at Ryan Beck & Co., noted that buy orders quickly entered the market as stocks sold off at the opening bell.
"Unfortunately, this is the world we live in now. Five years ago, the market would have been down much more. Now, we see it as a buying opportunity," Suskind said. "There's no panic."
In late afternoon trading, The Dow Jones industrial average gained 12.81, or 0.1 percent, to 10,283.49.
Other stock indicators were mixed. The Nasdaq composite index rose 4.05, or 0.2 percent, to 2,072.70, while the Standard & Poor's 500 index was up 0.12, or 0.01 percent, at 1,195.06.
The major indexes opened about 1 percent lower, but climbed steadily through the session, jumping higher around noon as Homeland Security Secretary Michael Chertoff commented that there was no evidence of a terrorist threat in the United States.
Nonetheless, investors bought up bonds, always seen as a safer investment than stocks. The yield on the 10-year Treasury note fell to 4.04 from 4.07 percent late Wednesday. Gold prices, another traditional safe haven for investors, also rose.
The dollar hit a 14-month high against the British pound after the explosions, but fell against the euro and was mixed against other major currencies.
Crude oil futures fell sharply after the Energy Department reported a drawdown of 3.6 million barrels of crude from the nation's petroleum reserves. Gasoline reserves also fell, but heating oil and other distillate reserves were up sharply. A barrel of light crude was quoted at $60.73, down 55 cents, on the New York Mercantile Exchange.
Europe's markets suffered steep losses, but investors were hopeful after European stocks cut their losses in late trading. Britain's FTSE 100 fell by as much as 4 percent, but recovered somewhat and closed 1.36 percent lower. France's CAC-40 fell 4.5 percent before recovering to a loss of 1.39 percent for the session, and Germany's DAX index was down 1.85 percent in late trading.
"American investors are not only reacting emotionally, they're trying to figure things out, trying to determine the economic impact of what happened," said Ken Tower, chief market strategist for Schwab's CyberTrader. "When you're not at the epicenter, that's easier to do. There were many more cooler heads outside of New York after 9/11, after all."
European Central Bank President Jean-Claude Trichet said he had discussed the situation with Federal Reserve Chairman Alan Greenspan and Bank of England head Mervyn King and concluded financial systems were working normally. "We are alert, we are vigilant," he told a news conference. Treasury Secretary John Snow added that the Bush Administration would keep close tabs on global markets.
The Nasdaq Stock Market said it increased security efforts at its New York headquarters and its data center in Connecticut. A New York Stock Exchange spokesman said the Big Board does not comment on its security measures.
In response to the attacks in London, investors sent biotechnology and biodefense shares higher. Human Genome Sciences Inc. gained 29 cents to $12.11, while Hollis-Eden Pharmaceuticals Inc. rose 40 cents to $7.96.
Airline stocks dropped sharply, however, as investors feared further terrorist attacks. U.S.-traded shares of British Airways dropped $1.63 to $46.24, while American Airlines parent AMR Corp. was down 19 cents at $12.03 and Delta Air Lines Inc. lost 14 cents to $3.34.
U.S. retailers reported very strong sales figures for June, a relief for a sector that struggled earlier in the year. Wal-Mart Stores Inc. added 20 cents to $49.58 after reporting solid monthly sales at stores open at least a year, while rival Target Corp., which saw a 9 percent jump in same-store sales and raised its second quarter profit forecasts, climbed 78 cents to $56.34.
Charles Schwab Corp. added 26 cents to $12.24 after the company said it was not for sale and would remain independent. The brokerage was seen as a takeover target after the recent merger of Ameritrade Holding Corp. and online broker TD Waterhouse.
Declining issues outnumbered advancers by nearly 3 to 2 on the NYSE, where volume came to 1.15 billion shares, compared with 1.07 billion at the same point on Wednesday.
The Russell 2000 index of smaller companies was down 0.29, or 0.04 percent, at 647.98.
In other overseas markets, Japan's Nikkei stock average fell 0.12 percent. The markets there closed before the London attacks occurred.
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AP Business Writer Ellen Simon contributed to this report.
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On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
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