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Stocks stage closing rally to finish up at end of wild day

UPDATED at 4:08 p.m.:

Stocks staged a big rally to finish out a wild ride that began with a massive drop as the Dow dipped below 10,000 followed by a defiant rally.

The Dow closed up 1.3 percent at 10,194.97. The Dow was down as much as 139 points today. For the week, the Dow swung in an 850-point range. The Dow closed down 4 percent this week and is down 7.4 percent so far this month.

The broader S&P 500 closed up 1.5 percent at 1,087.74. It looks like the lower resistance level for the S&P is about 1,060.

The tech-heavy Nasdaq closed up 1.1 percent at 2,229.04.

The markets swung in a 278-point range today in heavy volume. Today's buying follows what traders call over-selling. Financials helped lead today's unusual rally.

If this week was all about the U.S. market reaction to the chaos in Europe, next week should be a reaction to a lot of economic data scheduled for release.

The volatility index (VIX), otherwise known as the "fear index," settled down a little today from a ramp up all week.

Stocks struggle to hold gains

2:50 p.m.: After a wild ride, stocks are struggling to hold onto their gains as a big rally tapers off toward the last hour of trading of the week.

With about an hour to go on the day, the Dow has flirting with the flat line, trading back and forth between positive and negative territory.

The broader S&P 500 is up two-tenths of 1 percent.

The tech-heavy Nasdaq is up two-tenths of 1 percent.

The euro is making some slight gains against the dollar and oil is down, just under $70 per barrel.

Stocks stage defiant rally

Noon: Stocks have now turned strongly positive on a trading day that has been a wild roller-coaster ride until mid-day.

As of noon, the Dow is up 1 percent. The Dow is being led by financials. The Dow was down 149 points.

The broader S&P 500 is 1.4 percent.

The tech-heavy Nasdaq is up 1.5 percent.

The best word for this rally is "defiant." Markets plunged at opening, then rose, then dropped again into negative territory before seeming -- at least for now -- to become resolute and buy higher.

This rally flies in the face of global headwinds -- the German parliament approved that country's piece of the $1 trillion euro bailout, Thailand is still reeling from a revolt and Washington is moving toward the most new regulations on Wall Street since the Great Depression.

Stocks in roller-coaster ride

10:32 a.m.: Only an hour into the trading day and already it's a roller-coaster ride on Wall Street.

Stocks plunged at opening then turned around sharply, climbing into positive territory. Now, they've crested, and are heading back into negative territory.

The Dow is down half of 1 percent.

The broader S&P 500 is down two-tenths of 1 percent.

The tech-heavy Nasdaq is down three-tenths of 1 percent.

Financials are up, following the Senate's passage of the new financial regulation bill. Wall Street likes certainty and Wall Street feels like it dodged a bullet, or will, once the bill clears conference, CNBC's John Harwood reported this morning.

It's not surprising to see a big snapback rally after a large sell-off day, like we saw this morning. The harder part is keeping the rally going throughout the day and we'll see if this one has any spine to it.

Stocks execute breathtaking u-turn

9:58 a.m.: The markets have executed a breathtaking u-turn right after opening, fighting back against headwinds from around the globe.

Stocks dove sharply at opening, following yesterday's massive sell-off and continued problems in the European markets today.

But moments after opening -- whip! -- markets caught themselves and began shooting upward.

Just less than 30 minutes into the trading day, the Dow has turned positive after diving below 10,000 at the opening bell.

The broader S&P 500 has moved into positive territory following a dive at start.

The tech-heavy Nasdaq is up two-tenths of 1 percent.

Futures point to lower opening

8:56 a.m.: Things don't look good for the opening of the U.S. stock market today, following yesterday's big sell-off.

Futures, a predictor of how stocks may do at opening, are near the levels they hit after the May 6 flash crash.

Wall Street often follows Europe -- especially when it looks like Europe is aflame, like now -- and European markets are down in mid-day trading there.

The London's FTSE is down 2 percent, Germany's DAX is down 2.6 percent and France's CAC 40 is down 1.9 percent.

In Germany this morning, lawmakers approved their portion of the $1 trillion European bailout.

Here is the U.S., lawmakers approved the sweeping financial regulatory reform bill yesterday.

Today is also the day before May stock options expire on Wall Street, and that usually adds to volatility and often a sell-off.

The Associated Press says:

Corrections can be scary but they can be good for markets. Analysts say major stock indexes had become overheated in their climb from a 12-year low in March 2009. Corrections also aren't unusual. Drops of 10 percent occur in most years and don't necessarily that stocks will keep sliding.

"We don't think there is any predictability that just because we've had a 10 percent correction now that suddenly we're in for another 10 percent drop," said Bill Urban, principal with Bingham, Osborn & Scarborough, based in San Francisco.

The euro is ticking up against the dollar today.

By Frank Ahrens  |  May 21, 2010; 4:08 PM ET
Categories:  Wall Street  
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Next: GE's Immelt to college graduates: You're pretty much hosed.

Comments

classic panic. Probably a lot of people loading up their web trading with sell orders last night. Which makes it worse b/c they had a little time to take a drink and re-consider. Not saying the market won't slide today, but the investors (vice traders) should be looking for opportunities to buy stuff at much cheaper prices to do a long term hold.

Posted by: jhtlag1 | May 21, 2010 10:06 AM | Report abuse

The Plunge Protection Team is back to work. Keeping the DJIA above 10k and the 10 year yield under 4% has been the name of the game for over a year. If either fails, the US economic Ponzi comes unravelled fast.

At this rate, the DJIA should cross over/under 10k another 5 times before year end.

Posted by: bandcyuk | May 21, 2010 10:13 AM | Report abuse

It's just a normal reaction.

Two days ago, Angela Merkel banned naked short-selling in Germany. Instantly, banks who had been shorting Europe found themselves in deep trouble. Now they are trying to unload their crap on others... thus the selloff.

Posted by: tropicalfolk | May 21, 2010 10:15 AM | Report abuse

Is anyone surprised at this sell off?If you are you need to either get out of the investing business or stay away all together.This game has been playing out ever since the federal reserve was established in 1913.The criminals running the very select banks manipulate the markets to their liking,running up to highs and then instigating a massive sell off.The cycle continually plays itself out,and people continue to lose their money.

Until the "People"demand that the Fed be dismantled this illegal game will continue.....don't think for a minute that your representatives have your best interest at heart.

Posted by: mcap52 | May 21, 2010 10:24 AM | Report abuse

I'm sure it has nothing to do with "Financial Reform"!! Yes, Big Brother coming to the rescue. Everyone is running for the hills.

Posted by: AForgottenMan | May 21, 2010 10:29 AM | Report abuse

Well given the Market this week I guess this pretty well finishes most 401 k's.
Oh well working until age 99 always did have a certain appeal!

Posted by: KBlit | May 21, 2010 10:58 AM | Report abuse

Looking at the way this is all playing out, I think the wisest long-term investment for Western businessmen is learning to speak Chinese.

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Posted by: sevenfm | May 21, 2010 11:51 AM | Report abuse


Get out while you still can. Sell on the dead cat bounce.


Posted by: screwjob15 | May 21, 2010 12:41 PM | Report abuse

The Nation needs a completely different core financial system. Relying on the stock market for income or retirement is absurd. The stock market's history speaks for itself. Nothing is fixed-rate. It's all just dangerous speculation, and manipulated by big banks and corporations that just plain don't want anyone to have money except them. I like the use of the word, "criminals" by this post:

===========================================

Is anyone surprised at this sell off? If you are you need to either get out of the investing business or stay away all together. This game has been playing out ever since the federal reserve was established in 1913.The criminals running the very select banks manipulate the markets to their liking, running up to highs and then instigating a massive sell off. The cycle continually plays itself out,and people continue to lose their money.

Until the "People" demand that the Fed be dismantled this illegal game will continue.....don't think for a minute that your representatives have your best interest at heart.

Posted by: mcap52 | May 21, 2010 10:24 AM | Report abuse

Posted by: jacktar2001 | May 21, 2010 12:48 PM | Report abuse

The Nation needs a new core financial system. Relying on the stock market for income or retirement is absurd. The market's history speaks for itself. Nothing of consequence is fixed-rate. It's all dangerous speculation, manipulated by corporations and big banks, that don't want the "little people" to have any money at all. I like the following post, as it uses the word, "criminal"...

++++++++++++++++++++++++++++++++++++++++++

Is anyone surprised at this sell off?If you are you need to either get out of the investing business or stay away all together.This game has been playing out ever since the federal reserve was established in 1913.The criminals running the very select banks manipulate the markets to their liking,running up to highs and then instigating a massive sell off.The cycle continually plays itself out,and people continue to lose their money.

Until the "People"demand that the Fed be dismantled this illegal game will continue.....don't think for a minute that your representatives have your best interest at heart.

Posted by: mcap52 | May 21, 2010 10:24 AM | Report abuse


Posted by: jacktar2001 | May 21, 2010 12:53 PM | Report abuse

The comments to this entry are closed.

 
 
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