Stocks turn higher after 2 days of declines
Nov 9, 2012 at 1:56 PM
NEW YORK (AP) — Stocks turned higher on Wall Street Friday, reversing an early loss. The advance halted two days of sharp declines caused by concern that political wrangling in Washington could push the U.S. economy back into recession.
The Dow Jones industrial average rose 40 points to 12,851 as of noon Eastern. It was down as much as 67 points in the first half-hour of trading, but started to rise after news crossed that the University of Michigan's gauge of consumer confidence rose more than analysts had expected in November.
The market is coming off its worst two-day slide in a year. The Dow average plunged 434 since President Barack Obama won re-election as investors turned their focus to a deadline at the end of the year for Congress to act on reducing the budget deficit.
If it doesn't, a series of drastic government spending cuts and tax hikes will kick into effect, potentially derailing the U.S. economy. The Congressional Budget Office said Thursday that the measures, if implemented, would likely push the economy back into recession.
The dimming outlook for Europe also weighed on markets this week. The European Commission, the executive arm of the European Union, slashed its forecast for economic growth in the region Wednesday.
The yield on the 10-year Treasury note rose to 1.64 percent from 1.61 percent late Thursday.
In other trading, the Standard & Poor's 500 index advanced 6 points to 1,384 and the Nasdaq composite climbed 20 points to 2,916.
Among stocks making big moves:
— Online deals company Groupon slumped $1.08 to $2.84 after it said the company disclosed late Thursday that it was hurt by the economic problems in Europe and growth failed to meet its expectations.
— J.C. Penney dropped $1.33 to $20.36 after the company reported a loss that was larger than investors were expecting. Shoppers have been abandoning the store after it got rid of blockbuster sales in favor of everyday low prices.
— Kayak Software surged $8.22 to $39.26 after the company said it had agreed to be bought by rival travel website Priceline.com.