Stocks closed green on Friday after a late day rally occurred in both industrial, technology and energy sectors on Wall Street. Stocks spent most of the day in the red, threatening to compound with Thursday’s sell off as mounting fears that the worst effects of the credit crunch have not been realized
Regardless, momentum in big-cap technology stocks such as Google and big-cap energy stocks such as Schlumberger were aided by a 2% rise in oil price, which helped both stocks in the last hour of trading. Coincidentally, stocks such as Caterpillar and Honeywell also closed green after a strong US.. Job Market report was issued.
Fridays biggest loser, Merrill Lynch, fell as much as 12% on reports that the company could face billions more in additional losses in the upcoming weeks. This drop was Merrill’s biggest single day drop in 18 years.
Hugh Johnson, SEO of Johnston Illington Advisor investment office, commented “This is a tale of two stock markets. The reason for the volatility we’re seeing is that investors move between focusing on the bad news in housing and finance or on the good news, which is technology. Worries are that major financial institutions, Citi, Merrill and others, face very significant write-offs related to their portfolios. The question is: Will that curtail lending, and if so, what does that mean for an economy that runs on money and credit?”
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