The Kansas City Star, Mo., Local Stocks Column
By Rick Babson, The Kansas City Star, Mo.
Feb. 16–ROLLER-COASTER DAY WINDS UP HIGHER FOR STOCKS: New Federal Reserve chairman Ben Bernanke’s testimony on Capitol Hill boosted stocks, but only temporarily, before falling oil prices came to the rescue Wednesday.
Bernanke, in his first report to Congress as Alan Greenspan’s replacement at the Fed, said the nation’s economy has emerged from a year-end slump, but he also left open the door for more increases in the nation’s short-term interest rates.
The major indexes soared to daily highs on Bernanke’s remarks about the spread between the yields on long-term and short-term bonds, but they fell sharply as he warned that higher inflation could produce additional rate hikes.
Stocks moved above neutral throughout the afternoon as crude oil prices fell below $58 a barrel after the Energy Department reported rising supplies of oil and gasoline. OPEC also warned of weakening energy demand.
Oil-sensitive issues, such as truckers YRC Worldwide Inc. and Swift Transportation Co. Inc., gained ground.
The Dow Jones industrial average gained 30.58, or 0.28 percent, and closed at 11,058.97. The Dow swung almost 80 points in response to Bernanke’s testimony.
The Nasdaq composite index gained 14.26, or 0.63 percent, and closed at 2,276.43.
The Standard & Poor’s 500 index was up 4.47, or 0.35 percent, and closed at 1,280.00.
Although the Dow has gained 139 points this week and more than 340 for the year, analysts warned that stocks may be volatile until it becomes clear when the Fed will stop raising interest rates.
“There’s a jumpiness in the markets that we’re going to, unfortunately, live with a little while longer,” Richard Madigan of JP Morgan Private Bank told The Associated Press.
Light, sweet crude for March delivery fell $1.92 and settled at $57.65 a barrel on the New York Mercantile Exchange. Crude has fallen more than $4 this week and is at a two-month low.
Overland Park-based YRC Worldwide gained 84 cents, or 1.76 percent, and closed at $48.68.
Phoenix-based Swift gained 71 cents, or 2.86 percent, and closed at $25.55.
Brokerage Merrill Lynch & Co. Inc. rose 14 cents to $75.30 after it agreed to combine its investment management business with money manager BlackRock Inc. in exchange for a nearly 50 percent stake in BlackRock, the two sides said. The transaction would transform BlackRock into one of the world’s top money managers, with an asset base of about $1 trillion. BlackRock rose $5.29 to $151.25.
Wells Fargo & Co. rose 84 cents to $63.49, and Anheuser-Busch Cos. Inc. rose 71 cents to $41.68, after billionaire investor Warren Buffett’s holding company, Berkshire Hathaway Inc., disclosed significant holdings in the companies on Tuesday as part of required filings detailing Berkshire’s $42.7 billion stock portfolio. The documents filed with the Securities and Exchange Commission show that Berkshire has nearly doubled its stake in Wells Fargo since last May, when it held 56.4 million shares, and that it owned more than 5 percent of both companies. Berkshire’s thinly traded Class A shares fell $100 to $88,000.
Casual clothing retailer Abercrombie & Fitch fell $1.45 to $67.33 after it said fourth-quarter earnings surged 58 percent but warned that it expects slower same-store sales.
The Star’s wire services contributed to this report.
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